**Fund Manager**

An employee of the asset management company such as a mutual fund or life insurer,
who manages investments of the scheme. He is usually part of a larger team of fund
managers and research analysts.

**Application Amount for Fresh Subscription**

This is the minimum investment amount for a new investor in a mutual fund scheme.

**Minimum Additional Amount**

This is the minimum investment amount for an existing investor in a mutual fund
scheme.

**Yield to Maturity**

The Yield to Maturity or the YTM is the rate of return anticipated on a bond if held until
maturity. YTM is expressed as an annual rate. The YTM factors in the bond’s current
market price, par value, coupon interest rate and time to maturity.

**SIP**

SIP or systematic investment plan works on the principle of making
periodic investments of a fixed sum. It works similar to a recurring bank
deposit. For instance, an investor may opt for an SIP that invests Rs 500
every 15th of the month in an equity fund for a period of three years.

**NAV**

The NAV or the net asset value is the total asset value per unit of the mutual fund after
deducting all related and permissible expenses. The NAV is calculated at the end of
every business day. It is the value at which the investor enters or exits the mutual fund.

**Benchmark**

A group of securities, usually a market index, whose performance is used as a standard
or benchmark to measure investment performance of mutual funds, among other
investments. Some typical benchmarks include the Nifty, Sensex, BSE200, BSE500,
10-Year Gsec.

**Entry Load**

A mutual fund may have a sales charge or load at the time of entry and/or exit to
compensate the distributor/agent. Entry load is charged at the time an investor
purchases the units of a mutual fund.

The entry load is added to the prevailing NAV at the time of investment. For instance,
if the NAV is Rs. 100 and the entry load is 1 %, the investor will enter the fund at Rs. 101.
(Note: SEBI, vide circular dated June 30, 2009 has abolished entry load and mandated
that the upfront commission to distributors will be paid by the investor directly to the
distributor, based on his assessment of various factors including the service rendered
by the distributor).

**Exit Load**

Exit load is charged at the time an investor redeems the units of a mutual fund. The exit
load is deducted from the prevailing NAV at the time of redemption. For instance, if the
NAV is Rs. 100 and the exit load is 1 %, the redemption price would be Rs.99 per unit.

**Modified Duration**

Modified duration is the price sensitivity and the percentage change in price for a
unit change in yield.

**Standard Deviation**

Standard deviation is a statistical measure of the range of an investment’s
performance. When a mutual fund has a high standard deviation, its
means its range of performance is wide, implying greater volatility.

**Sharpe Ratio**

The Sharpe Ratio, named after its founder, the Nobel Laureate William Sharpe, is a
measure of risk-adjusted returns. It is calculated using standard deviation and excess
return to determine reward per unit of risk.

**Beta Ratio (Portfolio Beta)**

Beta is a measure of an investment’s volatility vis-a-vis the market. Beta of less than 1
means that the security will be less volatile than the market. A beta of greater than 1
implies that the security’s price will be more volatile than the market.

**Average portfolio PE (Average P/E)**

It is price to earnings ratio of the stocks calculated for the entire portfolio on a weighted
average basis.

**Average portfolio dividend yield (Average Dividend Yield)**

It is dividend yield of the stocks calculated for the entire portfolio on a weighted
average basis.

**Net Equity**

Net equity level is the net equity exposure percentage adjusted for any
derivative positions in stocks or index for hedging or rebalancing purpose.

**R Squared**

It is a statistical measure of how closely the portfolio returns are correlated with its
benchmark.

**AUM**

AUM or assets under management refers to the recent / updated cumulative
market value of investments managed by a mutual fund or any investment firm.

**Holdings**

The holdings or the portfolio is a mutual fund’s latest or updated reported statement of
investments/securities. These are usually displayed in terms of percentage
to net assets or the rupee value or both. The objective is to give investors
an idea of where their money is being invested by the fund manager.

**Nature of Scheme**

The investment objective and underlying investments determine the nature of the
mutual fund scheme. For instance, a mutual fund that aims at generating capital
appreciation by investing in stock markets is an equity fund or growth fund.
Likewise, a mutual fund that aims at capital preservation by investing in debt markets
is a debt fund or income fund. Each of these categories may have sub-categories.

**Rating Profile**

Mutual funds invest in securities after evaluating their creditworthiness as disclosed by
the ratings. A depiction of the mutual fund in various investments based on their ratings
becomes the rating profile of the fund. Typically, this is a feature of debt funds.