What is Shares?
A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business’s day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares. Read more for examples and further explanation including related video clips and also comments
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Tag: mutual
Yield Tilt Index Fund definition explanation
What is Yield Tilt Index Fund?
A type of mutual fund that allocates capital as a standard index, by replicating the holdings of a specified stock index, such as the Standard & Poor’s 500 Index (S&P 500), except that the fund weights its holdings towards stocks that offer higher dividend yields. Stocks with higher dividend yields are given a greater portfolio weighting, making them represent more of the fund’s portfolio than they otherwise would in the standard index. Read more for examples and further explanation including related video clips and also comments
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Rights of Accumulation – ROA definition explanation
What is Rights of Accumulation – ROA?
A right that allows a shareholder to receive reduced sales charges when the amount of mutual funds purchased, plus the amount already held, equals an ROA breakpoint. In addition, there is no time limit on how long the mutual fund needs to be held to qualify for a ROA. Read more for examples and further explanation including related video clips and also comments
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New Fund Offer – NFO definition explanation
What is New Fund Offer – NFO?
A security offering in which investors may purchase units of a closed-end mutual fund. A new fund offer occurs when a mutual fund is launched, allowing the firm to raise capital for purchasing securities. Read more for examples and further explanation including related video clips and also comments
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Institutional Fund definition explanation
What is Institutional Fund?
A mutual fund targeting high value investors with low fees, but high minimum requirements. Read more for examples and further explanation including related video clips and also comments
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Current Income definition explanation
What is Current Income?
The investment objective for a moderately conservative portfolio of securities or mutual funds that provides high dividend and annuity payments to satisfy an investor’s steady income requirements. Read more for examples and further explanation including related video clips and also comments
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Automatic Reinvestment Plan definition explanation
What is Automatic Reinvestment Plan?
An investment program in which capital gains or other income received from investments are automatically used for reinvestment purposes. In the case of a mutual fund, for example, capital gains produced by the fund would be used to automatically purchase more shares, instead of being distributed to the investor as cash. Read more for examples and further explanation including related video clips and also comments
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Investment Company Institute – ICI definition explanation
What is Investment Company Institute – ICI?
Founded in 1940, the Investment Company Institute, based in Washington, D.C., is the national trade association of U.S. investment companies, which includes mutual funds, closed-end funds, exchange-traded funds and unit investment trusts. Read more for examples and further explanation including related video clips and also comments
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Hedge Fund definition explanation
What is Hedge Fund?
An aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark).
Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year. Read more for examples and further explanation including related video clips and also comments
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Reinvestment definition explanation
What is Reinvestment?
Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.
1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares.
2. In terms of mutual funds, it is the reinvestment of distributions and dividends to purchase additional units of that fund.
3. In terms of tax gain/loss harvesting, it is the realization of losses to offset a capital gains liability. Read more for examples and further explanation including related video clips and also comments
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