Adv iso r
The organization employed by a mutual fund to give professional advice on the fund's
investments and to supervise the management of its assets.
The price at which a mutual fund's shares can be purchased. The asked or offering price means the current net asset value (NAV) per share plus sales charge, if any. For a no-load fund, the asked price is the same as the NAV.
a fund that spreads its portfolio among a wide variety of investments, including domestic and
foreign stocks and bonds, government securities, gold bullion and real estate stocks. This gives
small investors far more diversification than they could get allocating money on their
own. Some of these funds keep the proportions allocated between different sectors relatively
constant, while others alter the mix as market conditions change.
Auto mat ic Re inve st me nt
A service offered by most mutual funds whereby income dividends and capital gain
distributions are automatically invested into the fund by buying additional shares and thus
building up holdings through the effects of compounding.
The price at which a mutual fund's shares are redeemed (bought back) by the fund. The bid or redemption price means the current net asset value per share, less any redemption fee or back-end load.
System of evaluating the probability of whether a bond issuer will default. Standard and
Poor's Corp. and Moody's Investors Services, among other firms, analyze the financial
stability of both corporate and government bond issuers. Ratings range from AAA or Aaa
(extremely unlikely to default) to D (currently in default). Bonds rated BBB or below by S&P
or Baa or below by Moody's are not considered to be of investment grade. Mutual funds
generally restrict their bond purchases to issues of certain quality ratings, which are specified
in their prospectuses.
A mutual fund that seeks maximum capital appreciation through the use of investment
techniques involving greater than ordinary risk, such as borrowing money in order to provide
leverage, short-selling and high portfolio turnover.
An investment company that offers a limited number of shares. They are traded in the
securities markets, usually through brokers. Price is determined by supply and demand.
Unlike open-end investment companies (mutual funds), closed-end funds do not redeem their
Co nfir m Date
The date the fund processed your transaction, typically the same day or the day after your
A fee (or back-end load) imposed by certain funds on shares redeemed within a specific
period following their purchase. These charges are usually assessed on a sliding scale, such as
four percent to one percent of the amounts redeemed, with the fee reduced each year the
units are held.
Cus tod ian
The bank or trust company that maintains a mutual fund's assets, including its portfolio of
securities or some record of them. Provides safekeeping of securities but has no role in
Dai ly Divi de nd Fund
This term applies to funds that declare their income dividends on a daily basis and reinvest or
Div er sif icat ion
The policy of spreading investments among a range of different securities to reduce the risks
inherent in investing.
Rup ee- Cos t Ave ragi ng
The technique of investing a fixed sum at regular intervals regardless of stock market
movements. This reduces average share costs to the investor, who acquires more shares in
periods of lower securities prices and fewer shares in periods of high prices. In this way,
investing risk is spread over time.
The date on which a fund's Net Asset Value (NAV) will fall by an amount equal to the
dividend and/or capital gains distribution (although market movements may alter the fund's
closing NAV somewhat). Most publications which list closing NAVs place an "X" after a fund\u2019
name on its ex-dividend date.
The ratio of total expenses to net assets of the fund. Expenses include management fees,
12(b)1 charges, if any, the cost of shareholder mailings and other administrative expenses.
The ratio is listed in a fund's prospectus. Expense ratios may be a function of a fund's size
rather than of its success in controlling expenses.
Fan ni e Mae (Fed era l Mor tga ge A sso cia tion )
An agency established by the federal government, but owned by private stockholders, which
issues mortgage-backed certificates in $25,000 denominations. Timely payment of both
interest and principal are insured. A growing number of mutual funds emphasize investments
in these and other mortgage-backed securities.
Now bringing you back...
Does that email address look wrong? Try again with a different email.