Sales (Load) Charge
The front-end charge for purchasing shares of a load fund. This amount is added to the "net asset value" to determine the "asked" or the "offering price." While the maximum allowed load is 8.5%, the actual cost to the investor is 9.3% over the amount invested. The load may be reduced for larger purchases, known as "breakpoints."
One that restricts its holdings to stocks of companies in one market area or geographical sector, such as precious metals, finance, health care, technology, international, etc. Usually included as multi portfolios of single funds.
Securities and Exchange Commission (SEC)
Commission responsible for the regulation and enforcement of the country's investment laws.
A mutual fund whose prospectus allows for more than one portfolio. These portfolios may be specialized (as in a sector fund) or broad (as in growth stock portfolios and bond portfolios). Management can create additional portfolios without additional SEC registration.
A measure that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment.
The sale of a security which is not owned by the seller. The "short seller" borrows stock for delivery to the buyer, and must eventually purchase the security for return to the lender.
A signature guarantee is a signature that receives a medallion stamp from an officer of a bank, savings and loan or a broker who is a member of the New York Stock Exchange. Although it is similar to a notary seal, it is a step greater, and it is required for the protection of your account.
A mutual fund specializing in the securities of a particular industry or group of industries, special types of securities, or regional investments. Sometimes solo funds not designed for "switching," since there is no "family."
The relatively low volatility of a security or fund compared to the "market."
The range around the mean value of a set of outcomes; the higher the standard deviation, the more uncertain the results and the less likely that any single outcome will fall at or near the mean.
Standard & Poor's 500 Composite Stock Price Index (S&P 500)
The weighted average of 500 stocks which include 400 industrial, 40 financial, 40 utility and 20 transportation stocks. The index considered to best represent "the market."
Statement of Additional Information
That publication of a fund constituting all legal "offering" data. Prospectuses are abbreviated forms of the SAI.
The payment made in the form of security shares as opposed to cash.
Additional shares which represent an unchanged proportionate ownership interest in a mutual fund or corporation, distributed to stockholders.
Offspring of forwards, involving an exchange of streams of payments over time according to preset terms. The most common type is an interest-rate swap, in which one party agrees to pay a fixed interest rate in return for receiving a floating rate from another party.
Systematic Withdrawal Plans
Programs in which fund shareholders receive regular payments from their investments, usually drawn from principal monthly or quarterly, while dividends and capital gains are reinvested.