An investment horizon is the duration for which you plan to stay invested. It can be short-term, medium-term, or long-term, depending on your financial goals and risk appetite.

KYC (Know Your Customer) is a mandatory verification process required by SEBI for all investors. Once completed through registered agencies, your KYC is valid across the financial market, making future investments easier and faster.

Net Asset Value (NAV) represents the per-unit market value of a mutual fund. It reflects the value of all the securities held in the fund and helps determine the performance of a specific scheme.

In the growth option, all profits earned by the fund are reinvested back into the scheme. This helps your investment grow over time through compounding, without any regular payouts.

In a dividend payout option, a portion of the fund’s returns is distributed to investors periodically. As a result, the NAV of the fund reduces to the extent of the payout.

With dividend reinvestment, the declared dividend is used to purchase additional units of the fund. This increases your total investment units and supports long-term growth.

Purchase NAV is the price at which you buy units of a mutual fund. The number of units you receive depends on the investment amount divided by the NAV on the purchase date.

Redemption NAV is the price at which you sell your mutual fund units. It may include deductions like exit load if you withdraw your investment before a specified period.

Load funds charge a fee when you enter or exit the fund, while no-load funds do not have such charges. As per SEBI guidelines, most mutual funds today do not charge entry loads.

Equity Linked Savings Schemes (ELSS) offer tax benefits of up to ₹1.5 lakh under Section 80C. These funds invest in equities and come with a lock-in period of three years, combining tax savings with wealth creation.

The expense ratio is the annual cost charged by the fund to manage your investment. It includes administrative, management, and operational expenses, expressed as a percentage of the fund’s assets.

Mutual fund schemes are mainly classified based on their maturity period into open-ended schemes, which allow continuous investment and withdrawal, and close-ended schemes, which have a fixed investment period.

Sector-specific funds invest only in particular industries such as IT, banking, pharmaceuticals, or FMCG. While they can offer high returns, they also carry higher risk because their performance depends on a single sector.