Net Asset Value (NAV)
Net Asset Value is the market value of the assets of the scheme
minus its liabilities. The per unit NAV is the net asset value of the scheme
divided by the number of units outstanding on the Valuation Date.
Advisor
The organization employed by a mutual fund to give professional
advice on the fund’s investments and to supervise the management of its
assets.
Asked or Offering Price
The price at which a mutual fund’s shares can be purchased. The
asked or offering price means the current net asset value (NAV) per share
plus sales charge, if any. For a no-load fund, the asked price is the same as
the NAV.
Asset Allocation Fund
A fund that spreads its portfolio among a wide variety of investments,
including domestic and foreign stocks and bonds, government securities,
gold bullion and real estate stocks. This gives small investors far more
diversification than they could get allocating money on their own some.
Capital Appreciation Fun
A mutual fund that seeks maximum capital appreciation through the
use of investment techniques involving greater than ordinary risk, such as
borrowing money in order to provide leverage, short-selling and high
portfolio turnover.
Capital Gains Distributions
Payments (usually annually) to mutual fund shareholders of gains
realized on the sale of portfolio securities.
Capital Growth
A rise in market value of a mutual fund’s securities, reflected in its
net asset value per share. This is a specific long-term objective of many
mutual funds.
Certificate of Deposit
Interest-bearing, short-term debt instrument issued by banks and
thrifts.
Closed-End Investment Company
An investment company that offers a limited number of shares.
They are traded in the securities markets, usually through brokers. Price is
determined by supply and demand. Unlike open-end investment companies
(mutual funds), closed-end funds do not redeem their shares.
Commercial Paper
Short-term, unsecured promissory notes with maturates no longer
than 270 days. They are issued by corporations, to fund short-term credit
needs.
Common Stock Fund
An open-end investment company whose holdings consist mainly
of common stocks and usually emphasize growth of these funds keep the
proportions allocated between different sectors relatively constant, while
others alter the mix as market conditions change.
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