LEARN · MUTUAL FUNDS
LEARN · MUTUAL FUNDS
A mutual fund pools money from many investors and invests it — in shares, bonds or other assets — on their behalf. A professional fund manager at an Asset Management Company (AMC) runs it against a stated mandate. Each investor is allotted units; the per-unit price is the NAV (Net Asset Value), which rises and falls with the portfolio. The whole industry is regulated by SEBI, with AMFI as the industry body.
Put in a lumpsum or a monthly SIP, from as little as ₹500.
Your money joins thousands of others in one scheme and is managed to a defined objective.
Gains (NAV growth and payouts) are shared pro-rata by the number of units you hold.
A one-time investment — suits surplus capital and a clear view on entry.
A fixed amount every month — averages your cost across market cycles and builds discipline.
Systematic Transfer — move money in stages from one fund (e.g. liquid) into another (e.g. equity).
Systematic Withdrawal — draw a fixed amount regularly, useful for retirement income.
Net Asset Value — the per-unit price of the fund, declared each business day.
Annual cost of running the fund, charged as a % of assets. Lower is better; Direct plans cost less.
A small fee for redeeming early (e.g. within a year) — designed to discourage churn.
Direct plans carry no distributor commission, so a lower TER and higher returns; Regular plans include advice/commission.
Growth re-invests gains (compounding); IDCW pays them out periodically.
The index a fund is measured against; alpha is the excess return over it, beta the sensitivity to it.
| Fund type | Short-term | Long-term |
|---|---|---|
| Equity (≥65% equity) | Held < 12 months — 20% | Held ≥ 12 months — 12.5% on gains above ₹1.25 L / year |
| Debt (bought on/after 1 Apr 2023) | Gains taxed at your income-tax slab, regardless of holding period | |
| ELSS (tax-saver) | 80C deduction up to ₹1.5 L; 3-year lock-in; taxed like equity on exit | |