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Finance GlossaryOpen-End Fund
Open-End Fund
Definition of Open-End Fund
An open-end fund, also referred to as a mutual fund in India, is an investment vehicle that is constantly issuing new shares to investors and also redeeming shares on request. This structure means that the fund's total assets under management (AUM) and the number of outstanding shares change daily depending on the investor's purchases and redemptions.
Related Terms
Profit Taking
Profit-taking is the process of selling an investment that has increased in value to realise the profits. It is when an investor feels the price of an asset has peaked or is likely to reverse its trend, and that's when they would close their position. While a natural part of the investment cycle, widespread profit-taking can cause a temporary or sustained decline in the price of a security.
Balance Sheet
A balance sheet is a financial statement that reveals a company’s assets, liabilities, and shareholders’ equity. It can help current and potential investors understand the financial health of a company.
These are some of the key components of a balance sheet:
These are some of the key components of a balance sheet:
- Current assets : Cash & cash equivalents, marketable securities, accounts receivable, inventories, prepaid expenses, and other liquid assets
- Fixed assets : Property, equipment, furniture, machinery, software, and other intangible assets
- Current liabilities : Short-term debt, unearned revenue, accounts payable, other accrued expenses & liabilities
- Long Term liabilities : Long-term loans, bonds, and others
- Shareholders’ equity : Paid-in capital and retained earnings
Momentum Indicator
Momentum Indicator is a technical analysis tool that measures the speed and strength of price movements. It helps traders identify whether a trend is gaining or losing strength by comparing current prices to past prices, making it useful for spotting potential trend continuations or reversals.
Deferred Tax Asset
A deferred tax asset is an item on a company’s financial statement that can be used to get tax relief, generally in the event of overpaying taxes or net losses that are carried forward.
Companies tend to deduct these overpayments or losses for accounting purposes and to reduce their overall taxable income. Common examples of deferred tax assets include:
Companies tend to deduct these overpayments or losses for accounting purposes and to reduce their overall taxable income. Common examples of deferred tax assets include:
- Depreciation of fixed assets
- Net financial loss
- Bad debt
Foreign Direct Investment
Foreign Direct Investment (FDI) is the act of acquiring a majority stake in a company located in a different country with the intention of assisting, growing, and managing the business.
FDIs and FPIs may seem similar but there is a major difference - lasting interest. When a company or investor obtains at least 10% control of foreign company with the intention of actively managing the business, it’s known as lasting interest.
A company that establishes a subsidiary in another country can also be classified as FDI. FDIs can also be made through mergers and acquisitions as well as collaborations with foreign companies
FDIs and FPIs may seem similar but there is a major difference - lasting interest. When a company or investor obtains at least 10% control of foreign company with the intention of actively managing the business, it’s known as lasting interest.
A company that establishes a subsidiary in another country can also be classified as FDI. FDIs can also be made through mergers and acquisitions as well as collaborations with foreign companies
Long-Term Stocks
Long-term stocks are shares of companies that investors hold for three years or more with the intention of getting lucrative returns combined with solid future prospects. Long-term stocks are typically chosen based on fundamental analysis, including factors such as the company's financial health, growth potential, competitive advantage, and industry trends.
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