Expense ratio
Market basicsThe annual fee a fund charges, expressed as a percentage of assets under management.
In plain terms
Charged on your whole balance every year whether the fund wins or loses. It is the one certainty in investing.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Direct plan
Market basicsA mutual fund version with no distributor commission built into the expense ratio.
In plain terms
Same fund, same manager, same portfolio — typically 0.5–1% cheaper every single year.
Factsheet
Market basicsA monthly document disclosing a fund’s holdings, sector mix, turnover and expense ratio.
In plain terms
Free, two pages, and it answers everything a star rating cannot.
Regular plan
Market basicsThe version of a mutual fund scheme whose expense ratio includes a commission paid to the distributor who sold it.
In plain terms
Same scheme, same manager, same portfolio as the direct plan, typically 0.5–1% dearer every year. The extra is charged whether or not any advice is ever given.
AMC
Market basicsAlso called: Fund house, Asset management company
Asset Management Company — the entity that runs a mutual fund’s schemes.
In plain terms
The fund house. It earns the expense ratio whether the fund beats anything or not.
Mutual fund
Market basicsA pooled vehicle that collects money from many investors and buys a portfolio of securities on their behalf, priced daily at NAV.
In plain terms
Its expense ratio is charged annually on your whole balance whether the fund wins or loses — the one completely certain variable in investing.
Portfolio overlap
Market basicsThe extent to which two funds hold the same securities.
In plain terms
Four funds with the same top ten is one portfolio and four expense ratios.