Are you a Mutual Funds virgin? Know these terms to not sound like one.

AMC: Asset Management Company is the company that manages your funds of individual. For instance, if you buy Axis Bank Mutual Funds from Freecharge, Axis Bank is your AMC.

AUM: Asset under management is the total value of assets or capital owned by an AMC.

NAV: Net Asset Value of a Mutual Fund represents its per share market value which is updated daily. When you buy Mutual Funds, you buy it at the price of NAV and the same goes for selling the units too.

SIP: SIP is a systematic investment plan offered by mutual funds to investors to invest in a disciplined manner. You choose an amount you will invest at regular intervals. For example, you can choose to start an SIP for Rs. 5000 every month and Rs.5000 will be invested every month in Mutual Funds.

SWP: Systematic withdrawal plan allows you to withdraw your accumulated fund over a span of time. For instance, if you have been able to accumulate 1 crore over 20 years, you can choose to divide it into three years and have a monthly income instead of withdrawing the entire money.

Expense Ratio: Expense Ratio is the percentage of fees paid to the mutual funds companies to manage and operate the fund.

Lock in period: A period during which you are restricted from selling your mutual funds units. ELSS funds have 3 years lock-in period, while debt and liquid funds have much shorter lock-in period.

Annualized Returns: As the name suggests, it’s the amount of money your investment has earned over a year.

Check out Mutual Funds on Freecharge here.

*Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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