Fund Manager: An employee of the asset management company such as a mutual fund or life insurer, who manages investments of the scheme. He is usually part of a larger team of fund managers and research analysts.

Application Amount for Fresh Subscription: This is the minimum investment amount for a new investor in a mutual fund scheme.

Minimum Additional Amount: This is the minimum investment amount for an existing investor in a mutual fund scheme.

Yield to Maturity: The Yield to Maturity or the YTM is the rate of return anticipated on a bond if held until maturity. YTM is expressed as an annual rate. The YTM factors in the bond’s current market price, par value, coupon interest rate and time to maturity.

SIP: SIP or systematic investment plan works on the principle of making periodic investments of a fixed sum. It works similar to a recurring bank deposit. For instance, an investor may opt for an SIP that invests ₹ 500 every 15th of the month in an equity fund for a period of three years.

NAV: The NAV or the net asset value is the total asset value per unit of the mutual fund after deducting all related and permissible expenses. The NAV is calculated at the end of every business day. It is the value at which the investor enters or exits the mutual fund.

Benchmark: A group of securities, usually a market index, whose performance is used as a standard or benchmark to measure investment performance of mutual funds, among other investments. Some typical benchmarks include the Nifty, Sensex, BSE200, BSE500, 10-Year Gsec. Note: Pursuant to para 1.9 of SEBI Master Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/74 dated May 19, 2023, uniform structure for benchmarking of schemes has been prescribed by SEBI. These uniform benchmarking of schemes indices are termed as first tier benchmark which reflects the category of the scheme.
Further, Association of Mutual Funds in India (AMFI), in consultation with AMFI Valuation Committee, has published the list of benchmark as 1st tier benchmarks for mutual fund schemes and the same is also made available on its website https://www.amfiindia.com/research-information/other-data and https://www.amfiindia.com/importantupdates.
Benchmark indices for Schemes of BNP Paribas Mutual Fund have been aligned with AMFI prescribed 1st tier benchmarks for mutual fund schemes effective December 01, 2021.

Entry Load: A mutual fund may have a sales charge or load at the time of entry and/or exit to compensate the distributor/agent. Entry load is charged at the time an investor purchases the units of a mutual fund. The entry load is added to the prevailing NAV at the time of investment. For instance, if the NAV is ₹ 100 and the entry load is 1%, the investor will enter the fund at ₹ 101.

Note: SEBI, vide circular dated June 30. 2009 has abolished entry load and mandated that the upfront commission to distributors will be paid by the investor directly to the distributor. based on his assessment of various factors including the service rendered by the distributor.

Exit Load: Exit load is charged at the time an investor redeems the units of a mutual fund. The entry load is added to the prevailing NAV at the time of redemption. For instance, if the NAV is ₹ 100 and the exit load is 1%, the investor will redeem the fund at ₹ 101.

Modified Duration: Modified duration is the price sensitivity and the percentage Change in price for a unit change in yield.

Standard Deviation: Standard deviation is a statistical measure of the range of an investment’s performance. When a mutual fund has a high standard deviation, its means its range of performance is wide, implying greater volatility.

Sharpe Ratio: The Sharpe Ratio, named after its founder, the Nobel Laureate William Sharpe, is a measure of risk-adjusted returns. It is calculated using standard deviation and excess return to determine reward per unit of risk.

Beta: Beta is a measure of an investment’s volatility vis-a-vis the market. Beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 implies that the security’s price will be more volatile than the market.

AUM: AUM or assets under management refers to the recent / updated cumulative market value of investments managed by a mutual fund or any investment firm.

Holdings: The holdings or the portfolio is a mutual fund’s latest or updated reported statement of investments/securities. These are usuaIIy displayed in terms of percentage to net assets or the rupee value or both. The objective is to give investors an idea of where their money is being invested by the fund manager.

Nature of Scheme: The investment objective and underlying investments determine the nature of the mutual fund scheme. For instance, a mutual fund that aims at generating capital appreciation by investing in stock markets is an equity fund or growth fund. Likewise, a mutual fund that aims at capital preservation by investing in debt markets is a debt fund or income fund. Each of these categories may have sub-categories.

Rating Profile: Mutual funds invest in securities after evaluating their creditworthiness as disclosed by the ratings. A depiction of the mutual fund in various investments based on their ratings becomes the rating profile of the fund. Typically, this is a feature of debt funds.

Concept of Macaulay duration: The Macaulay Duration is a measure of a bond’s sensitivity to interest rate changes. It is expressed in annual terms. It is the weighted average term to maturity of the cash flows from a bond. The weight of each cash flow is determined by dividing the present value of the cash flow by the price. Factors like a bond’s price, maturity, coupon, yield to maturity among others impact the calculation of Macaulay duration. The Macaulay duration can be viewed as the economic balance point of a group of cash flows. Another way to interpret the statistic is that it is the weighted average number of years an investor must maintain a position in the bond until the present value of the bond’s cash flows equals the amount paid for the bond. As it provides a way to estimate the effect of certain market changes on a bond’s price, the investor can choose an investment that will better meet his future cash needs.

TER: TER refers to ‘Total Expense Ratio’ of the scheme and refer to the expenses that will be charged to the scheme These costs consist primarily of management fees and additional expenses, such as trustee fees, marketing and selling expenses, auditor fees and other operational expenses. The total cost of the scheme is divided by the scheme’s total assets to arrive at a percentage amount, which represents the TER, most often referred to as simply ‘expense ratio’ of the scheme.

In accordance with AMFI Best Practice guidelines circular no. 72/2018-19 dated June 26, 2018, the TER provided in this document refers to TER as on last day of the month and the same is being disclosed including additional expenses as per Regulations 52(6A)(b), 52(6A) (c) and GST. Further, for actual Expense ratio of the scheme, investors may refer to following link https://www.barodabnpparibasmf.in/ downloads/total-expense-ratio-of-mutualfund- schemes on website of mutual fund.

Tracking Difference: Tracking Difference is the annualized difference in daily returns between the NAV of the ETF/Index Fund and its underlying index over a period of time.

Tracking Error: Tracking error indicates how closely the portfolio return is tracking the benchmark Index return. It measures the deviation between portfolio return and benchmark index return. A lower tracking error indicates portfolio closely tracking benchmark index and higher tracking error indicates portfolio returns with higher deviation from benchmark index returns.