A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Annual and Semiannual Reports
Summaries that a mutual fund sends to its shareholders that discuss the fund's performance over a certain time period and identify the securities in the fund's portfolio as of a specified date.
Appreciation
An increase in an investment's value.
Assets
The current dollar value of the pool of money shareholders have invested in the fund.
Automatic Reinvestment
A fund service giving shareholders the option to purchase additional shares using dividends and capital gain distributions.
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Bear Market
A period during which security prices in a particular market (such as the stock market) are generally falling.
Bond
A debt security, or IOU, issued by a company, municipality or government agency. A bond investor lends money to the issuer and, in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually aims to pay the bondholder periodic interest payments over the life of the loan.
Bull Market
A period during which security prices in a particular market (such as the stock market) are generally rising.
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Capital Gain Distribution
Profits distributed to shareholders resulting from the sale of securities held in the fund's portfolio.
Compounding
Earnings on an investment's earnings. Over time, compounding can produce significant growth in the value of an investment.
Contingent Deferred Sales Charge (CDSC or back-end load)
A fee imposed when shares are redeemed (sold back to the fund) on a particular type of mutual fund during the first few years of ownership.
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Depreciation
A decline in an investment's value.
Diversification
The practice of investing broadly across a number of securities to reduce risk.
Dollar-Cost Averaging
The practice of investing a fixed amount of money at regular intervals, regardless of whether the securities markets are declining or rising. Systematic investment plans do not assure a profit or protect against loss in declining markets. Investors should consider their financial ability to continue purchases through periods of both high and low price levels.
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Exchange Privilege
A fund option enabling shareholders to transfer their investment from one fund to another within the same family of funds as their needs or objectives change.
Expense Ratio
A fund's cost of doing business (disclosed in the prospectus) expressed as a percentage of its assets.
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Family of Funds
A group of mutual funds, each with its own investment objective, typically managed and/or distributed by the same company.
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Income
Dividends, interest and/or short-term capital gains paid to a mutual fund's shareholders. Income is earned on a fund's investment portfolio after deducting operating expenses.
Inflation Risk
The risk that a portion of an investment's return may be eroded, or eliminated, by inflation.
Interest Rate Risk
The possibility that a bond's or bond mutual fund's value will decrease due to rising interest rates.
Investment Advisor
An organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices.
Investment Company
A corporation, trust or partnership that invests pooled shareholders dollars in securities appropriate to the organization's objective.
Investment Objective
The goal that an investor and mutual fund pursue together, for example, current income, long-term capital growth, etc.
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Liquidity
The ability to have ready access to invested money. Mutual funds are liquid because their shares can be redeemed for current value (which may be more or less than the original cost) on any business day.
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Mutual Fund
An investment company that stands ready to sell or buy back its shares at their current value.
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Net Asset Value (NAV)
The per-share value of a mutual fund, found by subtracting the fund's liabilities from its assets and dividing by the number of shares outstanding. Mutual funds calculate their NAVs at least once daily. This is the price at which a mutual fund's shares are redeemed, or bought back, by the fund.
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Portfolio Manager
A specialist employed by a mutual fund's advisor to invest the fund's assets in accordance with predetermined investment objectives.
Prospectus
The official document that describes a mutual fund to prospective investors. The prospectus contains information required by the SEC, such as investment objectives and policies, risks, services and fees.
Public Offering Price
The price at which a mutual fund's shares can be purchased. This offering price includes the current net asset value per share plus any front-end sales charge.
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Securities and Exchange Commission (SEC)
The primary U.S. government agency responsible for the regulation of the day-to-day operations and disclosure obligations of mutual funds.
Share Classes (e.g. Class A, Class B, etc.)
Represent ownership in the same fund, but charge different fees. This can enable shareholders to choose the type of fee structure that best suits their particular needs.
Stock
A share of ownership or equity in a corporation.
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Total Return
A measure of a fund's performance that encompasses all elements of return: dividends, capital gain distributions and changes in net asset values. Total return is the change in value of an investment over a given period, assuming reinvestment of any dividends and capital gain distributions, and is expressed as a percentage of the initial investment.
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Yield
A measure of net income (dividends and interest) earned by the securities in the fund's portfolio less fund expenses during a specified period. A fund's yield is expressed as a percentage of the maximum offering price per share on a specified date.
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