What is Foul Weather Fund?
A mutual fund that tends to perform well or better than the overall market during weak market conditions. Foul weather funds are created with downward market moves in mind where the goal of the fund is to limit or benefit from the effects of downward moves in the market. Read more for examples and further explanation including related video clips and also comments
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Tag: funds
Cherry Picking definition explanation
What is Cherry Picking?
1. The act of investors choosing investments that have performed well within another portfolio in anticipation that the trend will continue.
2. Relating to bankruptcy proceedings whereby the courts uphold contracts favorable to bankrupt companies, but annul those that are unfavorable. Read more for examples and further explanation including related video clips and also comments
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Spread-Load Contractual Plan definition explanation
What is Spread-Load Contractual Plan?
A fee-payment structure applicable to mutual funds in which the sales charge or commission (load) is not entirely paid at the time the investor first contributes funds to the mutual fund (or in the first several contributions either). Instead, the mutual fund load is dispersed across an extended time period, so that the load is more accurately applied to each contribution. Read more for examples and further explanation including related video clips and also comments
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Institutional Shares definition explanation
What is Institutional Shares?
A class of mutual fund shares available for sale to investing institutions, either on a load or no-load basis. With sizable minimum investments, usually around $500,000 or more, funds will typically waive any front-end sales charges on these shares. Read more for examples and further explanation including related video clips and also comments
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Variable Rate Demand Note (VRDN) definition explanation
What is Variable Rate Demand Note (VRDN)?
A debt instrument that represents borrowed funds that are payable on demand and accrue interest based on a prevailing money market rate, such as the prime rate. The interest rate applicable to the borrowed funds is specified from the outset of the debt, and is typically equal to the specified money market rate plus an extra margin. Read more for examples and further explanation including related video clips and also comments
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Mortgage Subsidy Bond definition explanation
What is Mortgage Subsidy Bond?
One of the few types of municipal bonds ever issued that may be subject to taxation, provided that the funds raised were used for home mortgages. Mortgage subsidy bonds were issued by cities and other municipalities, and may be either taxable or tax-free. Read more for examples and further explanation including related video clips and also comments
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Fixed-Income Arbitrage definition explanation
What is Fixed-Income Arbitrage?
An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income arbitrage strategy, the investor assumes opposing positions in the market to take advantage of small price discrepancies while limiting interest rate risk. Read more for examples and further explanation including related video clips and also comments
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Currency Carry Trade definition explanation
What is Currency Carry Trade?
A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage the investor chooses to use. Read more for examples and further explanation including related video clips and also comments
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Asset Swapped Convertible Option Transaction – ASCOT definition explanation
What is Asset Swapped Convertible Option Transaction – ASCOT?
An option on a convertible bond that is used to separate a convertible bond into its two components: 1) a bond and 2) an option to acquire stock. When the bond is stripped of its conversion feature, the holder has a bond featuring fairly stable returns on debt, and a volatile – but potentially very valuable – option. Read more for examples and further explanation including related video clips and also comments
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Silent Second Mortgage definition explanation
What is Silent Second Mortgage?
A secondary mortgage placed on an asset that is not disclosed to the lender of the original loan. Silent second mortgages are used when a purchaser can’t afford the down payment required by the initial mortgage. The mortgage is silent because the original lender is unaware of its presence. In many circumstances, a silent second mortgage is a type of fraud. Read more for examples and further explanation including related video clips and also comments
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