Vocabulary & Fund Types
Fund Types & Characteristics
Indicators & Other
Cost Options & Other
Returns & Fees
100
An investment company that pools the money from many investors, its shareholders, to invest in a variety of securities.
Mutual Fund
100
A mutual fund whose shares are issued and redeemed by the investment company at the request of investors.
Open-End Fund
100
The current market value of the securities contained in the mutual fund's portfolio, minus the mutual fund's liabilities, divided by the number of shares outstanding.
Net Asset Value
100
A mutual fund in which the individual investor pays no sales charge.
No-Load Fund
100
The earnings a fund pays to shareholders from its dividend and interest income.
Income Dividends
200
A group of mutual funds managed by one investment company.
Family of Funds
200
A mutual fund whose shares are issued by an investment company only when the fund is organized.
Closed-End Fund
200
The amount that investors pay for all of a mutual fund's management fees and operating costs.
Expense Ratio
200
A fund in which investors pay a commission every time they purchase shares.
Load Fund
200
The payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio.
Capital Gain Distributions
300
A fund type in which investors experience wide price swings because of the underlying speculative nature of the stocks in the fund's portfolio.
Aggressive Growth Funds
300
A fund that invests in the stocks or other securities contained in a specific stock or securities index.
Exchange-Traded Fund (ETF)
300
A ratio that measures the percentage of a fund's holdings that have changed or been replaced during a 12-month period of time.
Turnover Ratio
300
A 1-5% charge that shareholders pay when they withdraw their investment from a mutual fund.
Contingent Deferred Sales Load
300
A service provided by an investment company in which shareholder income dividends and capital gain distributions are automatically reinvested to purchase additional shares of the fund.
Reinvestment Plan
400
This type of fund is an attractive investment for conservative or retired investors as it is composed of stocks issued by companies with a long history of paying dividends.
Equity Income Funds
400
This fund type invests in foreign stocks sold in securities markets throughout the world.
International Funds
400
These are the two major reasons why people invest in mutual funds.
Professional Management and Diversification
400
This is usually the first piece of information investors receive and financial experts say it should be read completely before investing. Among other things, this summarizes the objectives and fees of a fund.
Prospectus
400
A fee that an investment company levies to defray the costs of advertising and marketing a mutual fund.
12b-1 Fee
500
This type of fund invests in companies with total capitalization of $2 billion to $10 billion.
Midcap funds
500
This fund type invests in high-yield, high-risk corporate bonds.
High-Yield (junk) Bond Funds
500
This fund type invests in various asset classes including stocks, bonds, fixed-income securities, and money market instruments.
Asset Allocation Funds
500
As a prospective investor, you can request this from a fund by mail, phone, or the internet. It includes, among other things, a letter from the fund's independent auditors as to the accuracy of the fund's financial statements.
Annual Financial Report
500
Fee of .25-1.5% per year of the fund's net asset value on a predetermined date.
Management Fee
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