Mutual Fund FAQ's

A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. It is managed by professional fund managers.

Investors buy units of a mutual fund scheme, and the money collected is invested in various assets based on the scheme’s objective. The returns generated are distributed among investors in proportion to their holdings.

NAV is the per-unit market value of a mutual fund scheme. It is calculated as: NAV = (Total Assets – Total Liabilities) / Number of Outstanding Units.

Mutual funds can be categorized based on:

• Asset Class: Equity, Debt, Hybrid, Solution-Oriented, etc.
• Structure: Open-ended, Close-ended, Interval funds.
• Investment Goal: Growth, Income, Tax-saving (ELSS), etc.

ELSS is a tax-saving mutual fund under Section 80C with a 3-year lock-in period. It invests primarily in equities and offers potential for higher returns.

SIP allows investors to invest a fixed amount regularly (monthly/quarterly) in a mutual fund scheme, promoting disciplined investing and rupee-cost averaging.

• Growth Option: Returns are reinvested, leading to capital appreciation.
• Dividend Option: Investors receive periodic payouts (not guaranteed).

• Equity Funds:
  • Short-term Capital Gains (STCG, <1 year): 20%
  • Long-term Capital Gains (LTCG, >1 year): 12.5% on gains above ₹1.25 lakh
• Debt Funds:
  • STCG (<2 years): As per income tax slab
  • LTCG (>2 years): 12.5% without indexation benefit

An exit load is a fee charged when investors redeem units before a specified period (e.g., 1%). It discourages premature withdrawals.

Investors can redeem via:

• Online portals (AMC website, mutual fund platforms)
• Offline (submitting a redemption request form)