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Terms |
Description |
|
Income / Debt Funds |
They are mutual funds that invest primarily in fixed income securities and aim to provide reasonable returns with low degree of risks. |
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Index Funds |
A type of mutual fund in which the portfolios are constructed to mirror a specific market index. Index funds are expected to provide a rate of return over time that will approximate or match, but not exceed, that of the market which they are mirroring. |
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Indexation |
The central government specifies an index linked to the wholesale price index. The indices of two years (year of purchase and the year of sale) are used for the purpose of computing capital gains tax. The purchase price is multiplied by the index of the year of sale and the product is divided by the index of the year of purchase. This benefit is available only if the security has been held for more than 12 months. On sale of equity-oriented mutual fund schemes, one can opt for paying tax at the rate of a flat 10% or go in for paying 20% after taking the benefit of indexation. |
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Inflation |
Defined as the fall in the value of a currency, it results in the rise in prices of goods and services over a period of time. |
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Inflation Risk |
The chance that the value of assets or income will be diminished as inflation shrinks the value of a currency. |
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International Funds / Emerging Market Funds |
Funds investing in assets or bonds/shares of companies from emerging economies. These are not permissible in India due to regulations against investing abroad. Most of the schemes of Foreign Institutional Investors (FII's) investing in India are funds of this type. |
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Investment Management |
Investment analysis and execution of investment plans in keeping with certain objectives. |
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Investment objective |
The declared purpose of investment of a mutual fund scheme |
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Investment strategy |
The internal guidelines that a fund follows in investing the money received from the investors |
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Initial Load |
a kind of sales charge that is paid before any amount gets invested into the mutual fund during its Initial Offer. |
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iSEC Bond Index (I-BEX) |
An index created by ICICI Securities as a benchmark for returns from debt instruments in the market. |