Mutual Funds FAQs

What is a Factsheet?

A Factsheet gives an overall idea of your mutual fund scheme as well as the fund house. It tells you the investment objective of the fund, where the fund invests, fees and charges, exit/entry loads, returns generated by the scheme over various time buckets, the Net Asset Value and the ratings of the underlying securities in the fund. Read the factsheet before deciding whether to invest in the fund or not.

What is scheme riskometer?

The Riskometer, which is part of the mutual fund factsheet, shows the risk level of the particular scheme at a glance. The various categories of risk are low, moderately low, moderate, moderately high and high. The regulator, Sebi, has made it mandatory for all mutual funds to include the riskometer. Debt funds would fall in the low to moderately high-risk categories while equity funds would fall in the moderately high to high-risk categories.

What are open-ended and close-ended funds?

Open-ended funds are funds in which you can invest and exit from any time. They do not have a fixed maturity period. Most equity funds are open-ended funds unless it is specified otherwise.
Close-ended funds are those in which you can invest only during a particular window, post-which the fund is closed for fresh investment. Besides, they can be redeemed only on maturity. If you wish to exit the fund before the maturity period, you will have to sell them on the exchanges.

What is scheme AUM?

Assets Under Management or AUM is the total market value of the corpus managed by the mutual fund. The fund house declares the AUM for its various schemes once in a quarter. Older funds with more number of investors will have large AUMs. The AUM size indicates the strength of the fund house. Though it does not necessarily mean that a fund with a large AUM is better than one with a small AUM.

What is CAGR, absolute returns and rolling returns?

CAGR or Compounded Annual Growth Rate shows how much your mutual fund returns have grown over a period of time, on an annualised basis. It is calculated by taking the average returns earned every year and adding it to the previous year’s growth.

Absolute Returns is the return generated by the fund over a specific period of time, i.e., how much the NAV has increased since investment.

Rolling Returns measure the returns generated by the mutual fund for a specific period of time, at regular intervals, over different time periods. For instance, you can look at the 1-year return of the fund at regular intervals over a 3-year or 5-year period and take the average of that. This will be called the 1-year rolling return. Similarly, you can get 3-year rolling return or 5-year rolling return.

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Mutual Funds FAQs

What is a Factsheet?

What is scheme riskometer?

What are open-ended and close-ended funds?

What is scheme AUM?

What is CAGR, absolute returns and rolling returns?

Open Access Blog

Invest in ELSS now and get tax benefit

Why SIPs are your best bet in a volatile market

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