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Glossary B

Back-end Load

A kind of redemption charge that an investor has to pay for withdrawing his money from the mutual fund. It is basically imposed to discourage investors from exiting the fund. It is also popularly referred to as an Exit Load.

Balance Maturity Tenure of a Scheme

It is defined in the case of close-ended schemes as the balance period remaining till the redemption of the scheme.

Balanced Funds

A class of mutual fund that aims at allocating the total assets with it in the portfolio mix of debt and equity instruments. A fund that invests substantially both in debt and equity.

Bear Market

It is a period in capital market when investors are on a selling spree and the share prices are going down.


It is a standard against which a scheme's performance can be compared. For example, the performance of a large cap oriented equity fund can be benchmarked against BSE Sensex.


It is the measure of the relative sensitivity of a stock or mutual fund to the market. The market is assigned a beta of 1. The higher the beta, the more sensitive the stock or fund is considered to be relative to the market as a whole. In other words, funds with beta more than 1 will react more to any fluctuations (whether upward or downward) in market than funds with beta less than 1.

Blue Chip Stock

Stock of a major corporation with a long fairly stable record of earnings and dividend payments and with good expected future growth.


A debt security issued with an interest-bearing promise to pay a specified sum of money due on a specific date in the future (maturity date).


Bonus is an allocation of additional units to the investors on the basis of their existing holdings. Basically, there is a split of existing units into more than one unit resulting in the reduction of the NAV per unit.


A broker is an intermediary who guides the investors on one or more investment avenues available to an investor and facilitates the process of investment.


It is the fee payable to a broker for acting as an intermediary in a transaction (normally a buy transaction). For example, brokerage is paid by a fund to a broker for getting fresh investments from investors.

BSE Sensitive Index

An index reflecting the stock prices of 30 companies listed on the Bombay Stock Exchange (BSE) which is taken to be representative of the stock market movement. It is usually considered as the benchmark index for performance evaluation of equity funds.

Bottom-up Investing

It is a strategy of selecting the company for investment first and then cross checking it by evaluating factors pertaining to the industry and the economy. It is the opposite of the top-down approach to investing.

Bull Market

Period during which the prices of stocks in the stock market keep continuously rising for a significant period of time on the back of sustained demand for the stocks.