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Mutual-Fund
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A return grade is defined as a quality rating of the stock or the bond based on the returns it offers to the investor.
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A risk grade can be explained as a quality rating of a mutual fund based on the risks of losses associated with it.
Definition: Risk adjusted return is a measure to find how much return an investment will provide given the level of risk associated with it. It enables the investor to make comparison between the high-risk and the low-risk return investment.
Description: By calculating risk-adjusted return, investors can judge whether he/she is extracting highest possible gains with minimal risk involved and thereby the returns on investment. Some of the popular risk adjusted return measures are Sharpe, Treynor and Jensen's Alpha.
Also See: Alpha, Beta, Standard Deviation, Sharpe Ratio, R Squared
PREV DEFINITION
A return grade is defined as a quality rating of the stock or the bond based on the returns it offers to the investor.
NEXT DEFINITION
A risk grade can be explained as a quality rating of a mutual fund based on the risks of losses associated with it.
Related Definitions
- Arbitrage FundBenchmark
: Arbitrage fund is a type of mutual fund that leverages the price differential in the cash and derivatives market to generate returns. The returns are dependent on the volatility of the asset. These funds are hybrid in nature as they have the provision of investing a sizeable portion of the portfolio in debt markets.Description: Arbitrage funds are the panacea for low risk taking investors. I
Benchmark Government Bond: A benchmark is an unmanaged group of securities which are considered as a 'benchmark' to measure a fund's/stock's performance. Benchmarks are generally broad market indices like BSE Sensex, CNX Nifty of the Indian stock market with which mutual fund returns are compared.Description: If a fund returned 59% in a particular year, but the benchmark Sensex returned 70%, this infers the fund under
Categories: Benchmark government bond is a debt security issued by the Central government with a residual maturity of 10 years. Description: This bond is backed by sovereign guarantee. Hence investors don’t face any default risk. At the maturity of one benchmark sovereign bond, another one with the same residual maturity is issued by the Central government. The coupon rate is decided by way of auc
msid=4006719,type=11 ##)Definition: Categories in the context to financial markets are asset classes where an investor can invest. There are various categories to invest in such as debt instruments, equity instruments and a portfolio of both.Description: Categories in context to mutual funds can be classified into equity fund, debt fund or hybrid funds with equity funds being classified by
- Closed-ended FundsCommodity Funds
: The unit capital of closed-ended funds is fixed and they sell a specific number of units. Unlike in open-ended funds, investors cannot buy the units of a closed-ended fund after its NFO period is over. Description: This means that new investors cannot enter, nor can the existing investors exit till the term of the scheme ends. However, to provide a platform for investors to exit before the t
Contingent Deferred Sales Charge: Commodity funds are funds which basically invest in commodities, such as gold, oil or livestock. They also invest in commodity futures and options. Some commodity funds invest in the stocks of companies, like gold funds which invest in the stocks of gold mining companies.Description: As the name suggests, a commodity market covers various kinds of products such as gold, oil and various agri
Credit Rating: It is the exit fee charged by a no load mutual fund. The CDSC is a reducing charge. It reduces annually and becomes zero upon completion of 4 years form the date of investment.Also See: Entry Load, Exit Load
: Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. It is a rating given to a particular entity based on the credentials and the extent to which the financial statements of the entity are sound, in terms of borrowing and lending that has been done in the past.Description: Usually, is in the form of a detailed report based on the fina
- CustodianDebt Funds
: A custodian is responsible for keeping as well as safeguarding the investments and securities on behalf of the owners.Description: A mutual fund company requires an organization or a bank to hold and safe keep records of its assets and investments which have been acquired using the pooled funds of a large number of investors. A custodian helps ensuring the interests of the investors by keepi
: Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills. Gilt fund, monthly income plans (MIPs), short term plans (STPs), liquid funds, and fixed maturity plans (FMPs) are some of the investment options in debt funds. Apart from these categories, debt funds include various funds investing in short term, medium term and long term bonds.Description: Deb
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