Amidst the full range of mutual fund schemes available for the investors to invest in, it is paramount to analyse a mutual fund scheme objectively. The decision of the investors to invest in a particular mutual fund scheme is often driven by various parameters, including but not limited to the fund performance, consistency of the performance, size of the fund, etc.
<p dir="ltr"><span id="docs-internal-guid-3e5ef402-7fff-042b-b39a-cbca4365267a">‘</span>Side pocket’ refers to a segregated portfolio in a mutual fund scheme with specific securities that have been affected by a credit event.
Solution oriented mutual funds are such funds that aim to fulfil the specific financial goals of the investors, like retirement, child’s education, marriage, etc. To encourage the investors to invest for the long term, such funds tend to carry a lock-in period of 5 years or till the attainment of the age of retirement/ child’s majority, whichever is earlier.
Floater Rate Fund is an open-ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/ derivatives). These schemes will invest at least 65% of its net assets in floating rate instruments.
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<p dir="ltr"><span>Just like any other type of investors, NRIs (Non-Resident Indians) can also invest in mutual funds in India, provided they adhere to the FEMA (Foreign Exchange Management Act) provisions. With a wide range of mutual fund schemes to choose from, the <a href="https://www.utimf.com/nri-center/">NRI investors</a> can build a diversified portfolio in their home country with an optimal mix of equity and debt schemes.
ETF stands for Exchange Traded Fund. As the name suggests, ETFs can be traded on stock exchanges, just like other stocks listed on stock exchanges.
As per the SEBI Guidelines, ETFs must invest at least 95% of their net assets in the underlying index's securities. Thus, ETFs adopt passive investment strategies tracking different indices, viz., equity, debt, or commodities.
NAV stands for Net Asset Value, which serves as the base and the transaction price for all the investment transactions, including purchase, redemption, switch transactions in a mutual fund scheme. For example, if NAV of mutual fund scheme is Rs. 10 and the investors have invested Rs. 5,000, 500 units will be allotted to the investor.
<p dir="ltr"><span>The investors are living in a dynamic world and the financial goals or the risk appetite of the investor may change over a period of time. As such, it makes sense for the investors to keep checking on a regular basis that they are on the right track to reach their financial goals. </span></p>
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<p dir="ltr"><span>ELSS (Equity Linked Savings Scheme) fund refers to the specified equity mutual fund scheme, which invests at least 80% of its net assets in equity-related investments and carries a lock-in period of three years. The investment in such funds is eligible for tax benefit under Section 80C of the Income Tax Act 1961. </span></p>
<p dir="ltr"><span>Equity Funds</span> are a specific category of mutual fund schemes that invest predominantly in equity and equity-related securities. The investment exposure can be in the form of direct investments in equity shares of domestic companies or through related derivatives with underlying equity exposure. Since equities equip the investors with the potential of long-term wealth creation, such funds are considered to be an preferred investment to achieve long-term financial goals. </p>
