Mutual Funds – II

                                       Mutual Funds

Tax Efficiency?

To reduce the tax investing your money in different investment schemes is called Tax Efficiency. Investing in mutual funds that depends on the stock market and fixed deposit can reduce your income tax and save money.

What is Tax Efficiency Fund?mutualfund

The mutual funds that help to leverage your income tax is called Tax Efficiency Fund. In these types of fund the investment in company stocks will be minimum of 65%.

What is a Target Risk Fund?

In some funds target will be fixed and the risk taken to achieve the target is called Target Risk Fund. In these types of fund, according to their risk can be classified as conservative, aggressive and moderate. The Fund Manager will be the sole responsible for these types of investments.

What are Redemption Fees?

Investors will seek redemption from mutual fund organizations and for those investors have to pay some amount to the mutual fund companies which are called as redemption fees. This redemption amount may vary between different mutual fund companies. The redemption fees are also called as exit load.

What is Relative Return?

Comparing a mutual fund’s income against its benchmark index income is called as Relative Return. Suppose, for example, if an infra mutual fund income provides a 15% income and its benchmark index provides 12% income then the relative return is 3%.

What is Sales Charge?

Brokers and financial advisors will be paid for each unit bought by investors in mutual funds which is called as a sales charge. In mutual a fund sales charge will be collected along when the unit is bought. In case of long term funds the sales charge will be collected at a specific period.

What is a Sector Fund?

There are different sectors like banking, infra, Pharma, automobile and IT. Investing in these types of sectors is called as Sector Fund. If there is much need for service and product of any sector, then the stock price of that sectors stock will increase, at the same time the NAV for that particular sector will also increase. This type of fund has much risk because it is based on a particular sector; at the same time there is a good chance to make more returns by investing based on the advice of a good fund manager.

What is Service Share?

During the time when a mutual fund unit is bought the service charge will also be collected along with that which is called service share. Service share will not come under the charges like the service charge collected for doubts or information about a fund, entry amount and exit amount.

What is Mutual Fund Liquidity Ratio?

The comparison of Total asset of a mutual fund organization against the liquid cash that the mutual fund organization holds is called a mutual fund liquidity ratio. If the organization has fewer amounts in liquid cash than the organization is considered to have more investments. If a mutual fund organization is invested in a right way, then investors have minimum risk in investing.

Top Traders India © 2014 Top Traders India