TER­MI­NOL­OGY EX­PLAINED

Dalal Street Investment Journal - - COVER STORY -

AUM: As­sets un­der man­age­ment (AUM) is the to­tal mar­ket value of as­sets that an in­vest­ment com­pany or fi­nan­cial in­sti­tu­tion man­ages on be­half of in­vestors. NAV: Net as­set value (NAV) is value per share of a mu­tual fund or an ex­change-traded fund (ETF) on a spe­cific date or time. Ex­pense ra­tio: It is a mea­sure of what it costs an in­vest­ment com­pany to op­er­ate a mu­tual fund. An ex­pense ra­tio is de­ter­mined through an an­nual cal­cu­la­tion, where a fund's op­er­at­ing ex­penses are di­vided by the av­er­age value of its as­sets un­der man­age­ment (AUM). Turnover ra­tio: The turnover ra­tio is the per­cent­age of a mu­tual fund that have been re­placed in a given year, which varies by the type of mu­tual fund, its in­vest­ment ob­jec­tive and/or the port­fo­lio man­ager's in­vest­ing style. YTD : Year to Date In­vest­ment Style: It is strat­egy or the­ory used by Fund man­ager to set as­set al­lo­ca­tion and choose in­di­vid­ual se­cu­ri­ties for in­vest­ment. The in­vest­ment style of a fund helps set ex­pec­ta­tions for long-term per­for­mance po­ten­tial and aids in ad­ver­tis­ing the fund to in­vestors look­ing for a spe­cific type of mar­ket ex­po­sure.

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