NAV
Market basicsAlso called: Net asset value
Net Asset Value — a mutual fund’s holdings minus liabilities, divided by units outstanding.
In plain terms
A low NAV is not cheap. It reflects how long the fund has existed, not what it is worth.
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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Indicative NAV
Market basicsAlso called: iNAV
The value of an exchange-traded fund’s underlying basket, computed and disseminated at short intervals during the session, as distinct from the price its units are changing hands at.
In plain terms
An ETF has two prices at once and your chart draws only the traded one. Comparing the two is the fastest way to tell whether a wick was information or a dislocation.
AMFI
Regulation & taxAssociation of Mutual Funds in India — the industry body publishing official NAV and scheme data.
In plain terms
The primary source for fund data, free of whatever a platform wants to sell you.
Creation unit
Market basicsThe fixed large block in which an exchange-traded fund’s units are created or redeemed against the underlying basket at the official NAV, rather than one at a time on the exchange.
In plain terms
It is the mechanism that ties an ETF’s traded price to what it holds. When new units cannot be made, that tether is off and a premium can stand for weeks.
Cut-off time
Market basicsThe daily deadline determining which day’s NAV a mutual fund transaction receives.
In plain terms
What binds is when the money reaches the fund house, not when you tapped invest.
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.
ETF
Market basicsExchange-Traded Fund — an index fund that trades on the exchange like a share.
In plain terms
Needs a demat account and buys at a live price rather than end-of-day NAV.
Portfolio turnover
Market basicsHow much of a fund’s portfolio was bought and sold during the year.
In plain terms
A cost paid from the fund’s assets before the NAV you see. 200% means the whole portfolio changed twice.
Segregated portfolio
Market basicsAlso called: Side pocket
A side pocket created on a credit event, carving the affected security into separate units issued to everyone holding on that day.
In plain terms
It exists so that whoever redeems first cannot exit at a NAV still valuing a bond nobody can sell, leaving the loss with whoever stayed. Any later recovery is paid to the segregated units.
STT
Regulation & taxSecurities Transaction Tax — a government levy collected on exchange trades.
In plain terms
Often larger than your brokerage. Unavoidable, and charged on both sides for delivery.