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Inception date
The first date from which a fund's returns are calculated.
Income funds
A mutual fund that primarily seeks current income rather
than growth of capital. It will
tend to invest in stocks and bonds
that normally pay high dividends and
interest.
Index
Statistical composite that measures changes in the economy
or in financial markets. Usually, equity
funds use BSE 30 or BSE 200 as the benchmark. For fixed-income
funds it is a bond index. The benchmark index must consist
of securities similar to which the scheme invests in.
Indexing
An investment strategy that consists of the construction
of a portfolio (generally stocks) based on an Index. Funds that follow this approach
are designed to track the total return of an index.
Inflation risk
The possibility that the value of assets
or income will be eroded by inflation affecting the purchasing
power of a currency. Often mentioned in relation to fixed
income funds as they may minimise the possibility of losing
principal.
Initial Public Offer (IPO)
A fixed time period during which units of
a new fund are made available for sale to the public for the
first time.
Interest rate risk
The risk that a security's value
will change due to an increase or decrease in interest rates.
A bond's price will always drop as interest rates rise and when
interest rates fall, a bond’s price will rise.
Issue
A security made available to the
public. Mutual funds issue shares to investors in return for cash.
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