Financial Glossary
The financial industry is notorious for its jargon. We believe clarity is the first step to wealth. Use our search-first dictionary to translate complex terms into plain English.
AUM (Assets Under Management)
The total market value of the investments that a person or entity manages on behalf of clients.
Alpha
A measure of performance on a risk-adjusted basis. Alpha represents the value that a portfolio manager adds or subtracts from a fund's return over the market benchmark.
Asset Allocation
An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.
Bear Market
A condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining.
Bull Market
A financial market of a group of securities in which prices are rising or are expected to rise.
Capital Gains
An increase in a capital asset's value. It is considered to be realized when the asset is sold.
Compounding
The process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.
Diversification
A risk management strategy that mixes a wide variety of investments within a portfolio.
ELSS (Equity Linked Savings Scheme)
A type of mutual fund that invests primarily in equity and offers tax deductions under Section 80C of the Income Tax Act.
Expense Ratio
The annual maintenance charge levied by mutual funds to finance its expenses, expressed as a percentage of the fund's average assets.
Inflation
The decline of purchasing power of a given currency over time.
LTCG (Long-Term Capital Gains)
The profit earned on the sale of an asset that has been held for a specified extended period (usually over 1 year for equities).
SIP (Systematic Investment Plan)
An investment vehicle offered by mutual funds to investors, allowing them to invest small amounts periodically instead of lump sums.
Term Insurance
A type of life insurance policy that provides coverage at a fixed rate of payments for a limited period of time, the relevant term.