A mutual fund pools investor money under a stated scheme mandate. Investors hold units; the NAV represents the per-unit value calculated under the applicable rules.
What to inspect
- scheme objective and permitted assets;
- actual holdings and concentration;
- benchmark and risk label;
- expense ratio, exit load and tracking difference where relevant;
- liquidity and redemption terms; and
- current tax classification.
Equity, debt, hybrid, index and other categories can contain materially different risks. A category name does not guarantee capital protection or a return.
SIP and lump sum are payment-timing methods. Direct and regular plans are distribution variants of a scheme and can have different expenses. None of these labels determines future performance.
Calculator examples that use a constant return are illustrations only. Mutual-fund returns are market-linked, can be negative, and should not be represented by a fixed expected percentage.