SIP
A Systematic Investment Plan invests a fixed amount in a mutual fund at regular intervals, usually monthly, helping you build a habit and average purchase cost over time.
Plain language
Money glossary
Short definitions for the terms you meet while reading Money Minds — SIP, NAV, allocation and more.
Mutual fund
A pooled investment vehicle where many investors buy units of a professionally managed portfolio of stocks, bonds or other assets.
NAV
Net Asset Value is the per-unit price of a mutual fund, calculated from the fund’s assets minus liabilities divided by outstanding units.
Expense ratio
The annual cost of running a mutual fund, expressed as a percentage of assets. Lower expense ratios generally leave more return for investors, all else equal.
Asset allocation
How you split money across asset types such as equity, debt and gold. Allocation usually drives long-term results more than picking a single “hot” fund.
Rupee-cost averaging
Investing fixed amounts regularly so you buy more units when prices fall and fewer when prices rise — a core benefit of SIPs.
Equity
Ownership stakes in companies (shares). Equity can grow faster over long periods but also moves up and down more sharply in the short term.
Debt fund
A mutual fund that invests mainly in bonds and money-market instruments. Often less volatile than equity, but still carries interest-rate and credit risk.
Index fund
A fund designed to track a market index (for example Nifty 50) rather than beat it. Typically lower cost and transparent.
Emergency fund
Cash set aside for unexpected expenses — often 3–6 months of essential costs — so you do not have to sell investments in a rush.
Compounding
Earning returns on both your original investment and earlier returns. Time and consistency make compounding powerful.
Diversification
Spreading investments so one bad outcome does not dominate your results — across funds, sectors, or asset classes.