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Decoding Mutual Fund Terminology: Stocks Held by Mutual Funds

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Created on
May 22, 2023


What’s Inside

A mutual fund is an easy and inexpensive way to create a diversified investment portfolio. However, many people don’t know about them or get intimidated by the jargon used in the market. They find mutual funds too complex to invest in despite their endless benefits.

One such term is mutual fund holding, which is the collection of assets and stocks held by mutual funds. While the term may sound complicated to a beginner, it’s easy to understand and work around, like most other terms.

So if you’re among them, here you can learn all about mutual fund holdings and other related terms.

Definition of Mutual Fund Holdings

Mutual fund holdings refer to the securities or assets a mutual fund holds. These holdings can include equities, debts, and other types of securities. Mutual funds aim to offer investors a diversified portfolio of assets, which can help dodge risks and maximise returns.

When a fund manager selects mutual funds to include to create holdings, they focus on the fund’s investment objective.

Let’s understand with an example. A mutual fund holding stocks of large-cap companies aims to invest in large-cap stocks. On the other hand, a mutual fund that invests in bonds will maintain bonds in large numbers compared to other assets.

Now that you know what mutual fund holding means, it’s time to learn other related terms to help you enter this investment world. To understand more about mutual funds and how they work, check out this short video: 

Important Terms Related to Mutual Fund Holdings

Here are a few crucial terms you’d come across when investing in mutual funds.

1. Asset Allocation

Asset allocation involves the division of a portfolio among different asset classes, like bonds, stocks, and other securities. Mutual funds leverage asset allocation to diversify the portfolio of holdings.

2. NAV (Net Asset Value)

The net asset value (NAV) is the value of a mutual fund's assets after subtracting the liabilities and expenses divided by the number of outstanding shares.

  • NAV = [Assets – (Liabilities + Expenses)] / Number of outstanding share units

It indicates the price per share of the mutual fund. When you invest in a mutual fund, you get share units based on its current NAV.

3. Expense Ratio

An expense ratio is a fee an AMC charges each year to cover its operating expenses. In other words, it’s the cost of owning a mutual fund. It can include management fees, administrative expenses and similar charges.

The percentage of the fund's assets represents the expense ratio.

  • Expense Ratio = (Total costs borne by mutual fund) / (Average assets under management)

4. Equity Funds

Equity funds are mutual funds holding primarily equity stocks. These funds can focus on specific stock types, such as large-cap or small-cap stocks, or have a diversified portfolio across different stocks.

Mutual Fund Holdings - Wrap Up

Mutual Fund investments on Fi Money are commission-free. With its intuitive user interface, suited for novice & seasoned investors, you can select from over 800 direct Mutual Funds. Plus, Fi's 100% secure as it functions under the guidance of epiFi Wealth, a SEBI-registered investment advisor. To help simplify the steps involved, you can invest daily, weekly, or monthly via automatic payments or SIPs — created with one screen tap. Moreover, Fi offers 100% flexibility with zero penalties for missed payments. 

Frequently Asked Questions

1. What Are Mutual Funds?

Mutual funds are trust funds. Multiple people who have common investing goals create a pool of money for the fund. A fund manager manages this pool of money, using their expertise to make investment decisions on behalf of the investors. They invest money in purchasing a diversified portfolio of securities, such as equities, bonds, and instruments.

In return for the investment, investors receive shares of the mutual funds, representing their portion of the fund’s holdings


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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