Funds, ETFs & Index Investing
7 terms
ELSS
Funds, ETFs & Index Investing
qualitative
An equity-linked savings scheme: a diversified equity fund with a three-year lock-in that qualifies for a tax deduction.
Test: minimum 80% in equity, three-year lock-in per instalment, and eligibility under Section 80C of the Income Tax Act
Equal-Weighted Index
Funds, ETFs & Index Investing
%
An index in which every constituent carries the same weight regardless of company size.
Weight of each Constituent = 1 / Number of Constituents
Equity Fund
Funds, ETFs & Index Investing
qualitative
A mutual fund investing at least 65% of its assets in Indian equity and equity-related instruments.
Test: minimum 65% allocation to domestic equity, which also determines the scheme's tax treatment
ETF Premium/Discount
Funds, ETFs & Index Investing
%
The gap between an ETF's market price and the value of its underlying holdings.
Premium or Discount % = (Market Price - iNAV) / iNAV x 100
Exchange-Traded Fund
Funds, ETFs & Index Investing
qualitative
A fund whose units trade on a stock exchange throughout the day at market-determined prices.
Test: units are listed and traded on an exchange, with creation and redemption in large blocks by authorised participants
Exit Load
Funds, ETFs & Index Investing
%
A charge deducted from redemption proceeds when units are sold within a stated period of purchase.
Exit Load = Redemption Value x Load Percentage, applied if held less than the stated period
Expense Ratio
Funds, ETFs & Index Investing
%
The annual cost of running a fund, expressed as a percentage of its assets and deducted from the NAV.
Expense Ratio = Total Annual Costs / Average Assets Under Management x 100