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Definition of Index fund
Investment fund designed to match the returns on a stockmarket index.
Mutual funds that aim to track the performance of a specific stock or bond index. This process is also referred to as indexing and passive management.
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.
index Portfolio Rebalancing Service (IPRS) is a comprehensive investment service that can help increase potential returns while reducing volatility. Several portfolios are available, each with its own strategic balance of index funds. IPRS maintains your personal asset allocation by monitoring and rebalancing your portfolio semi-annually.
Mutual funds that do not charge an upfront or back-end commission, but instead take out up to
For investment companies, the management fee and "other expenses,"
Also known as a trading index (TRIN)= (number of advancing issues)/ (number of declining
An investment company that invests in stocks and bonds. The same as a balanced mutual fund.
This is a fund that buys common stock, preferred stock and bonds. The same as a
The beta of a fund is determined as follows:
The measure of a fund's or stocks risk in relation to the market. A beta of 0.7 means
Designing a portfolio so that its performance will match the performance of some bond index.
Purchasing the stocks in the S&P 500 in the same proportion as the index to achieve the
An investment company that sells shares like any other corporation and usually does not
The CPI, as it is called, measures the prices of consumer goods and services and is a
An index calculated by tracking the cost of a typical bundle of consumer goods and services over time. It is commonly used to measure inflation.
Cost of funds
Interest rate associated with borrowing money.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
The European, Australian, and Far East stock index, computed by Morgan Stanley.
EFT (electronic funds transfer)
funds which are electronically credited to your account (e.g. direct deposit), or electronically debited from your account on an ongoing basis (e.g. a pre-authorized monthly bill payment, or a monthly loan or mortgage payment). A wire transfer is a form of EFT.
Employee stock fund
A firm-sponsored program that enables employees to purchase shares of the firm's
Investment funds established for the support of institutions such as colleges, private
Also called indexing plus, an indexing strategy whose objective is to exceed or replicate
Non-interest bearing deposits held in reserve for depository institutions at their district Federal
Federal funds market
The market where banks can borrow or lend reserves, allowing banks temporarily
Federal funds rate
This is the interest rate that banks with excess reserves at a Federal Reserve district bank
Federal Funds Rate
The interest rate at which banks lend deposits at the Federal Reserve to one another overnight.
Forward Fed funds
Fed funds traded for future delivery.
Set of funds with different investment objectives offered by one management company. In many
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
Analysts who attempt to find under- or overvalued securities by analyzing fundamental information, such as earnings, asset values, and business prospects.
The product of a statistical model to predict the fundamental risk of a security using not
In the model for calculating fundamental beta, ratios in risk indexes other than
Debt maturing after more than one year.
Debt with more than 1 year remaining to maturity.
The price of obtaining capital, either borrowed or equity, with intent to carry on business operations.
The ratio of a pension plan's assets to its liabilities.
Related: interest rate risk
Funds From Operations (FFO)
Used by real estate and other investment trusts to define the cash flow from
A mutual fund that can invest anywhere in the world, including the U.S.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
A fund that may employ a variety of techniques to enhance returns, such as both buying and
High-coupon bond refunding
Refunding of a high-coupon bond with a new, lower coupon bond.
A mutual fund providing for liberal current income from investments.
Mutual funds that seek regular income. This type of fund invests primarily in government, corporate and other types of bonds, debt securities, and other income producing securities and in certain circumstances can also hold common and preferred shares.
A series of numbers measuring percentage changes over time from a base period. The index number for the base period is by convention set equal to 100.
An index is a statistical measure of a market based on the performance of a sample of securities in that market. For example, the S&P/TSX Composite index reflects the performance of the most actively traded stocks on The Toronto Stock Exchange.
Index and Option Market (IOM)
A division of the CME established in 1982 for trading stock index
An investment/trading strategy that exploits divergences between actual and theoretical
A model of stock returns using a market index such as the S&P 500 to represent common or
A call or put option based on a stock market index.
A stock index option issued by either a corporate or sovereign entity as part of a security
The adjustment of benefits to compensate for the effects of inflation.
Bond whose payments are linked to an index, e.g. the consumer price index.
A passive instrument strategy consisting of the construction of a portfolio of stocks designed to
internally generated funds
Cash reinvested in the firm; depreciation plus earnings not paid out as dividends.
A mutual fund that can invest only outside the United States.
A mutual fund that can invest in securities issued anywhere outside of Canada.
International Monetary Fund
An organization founded in 1944 to oversee exchange arrangements of
International Monetary Fund (IMF)
Organization originally established to manage the postwar fixed exchange rate system.
An index that uses the capital asset pricing model to determine whether a money manager
Labour-Sponsored Venture Funds
Venture capital corporations established by labour unions. They function as other venture capital corporations but are subject to government regulation.
Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed
Life Income Fund
Commonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement Income funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80.
A mutual fund with shares sold at a price including a large sales charge -- typically 4% to 8% of
Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.
Measure of the investment performance of the overall market.
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
A bank is said to match fund a loan or other asset when it does so by buying (taking) a deposit of
Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances,
money market fund
A type of mutual fund that invests primarily in short-term debt securities maturing in one year or less. These include treasury bills, bankers’ acceptances, commercial paper, discount notes and guaranteed investment certficates.
Mutual funds are pools of money that are managed by an investment company. They offer
When you buy a mutual fund, you are pooling your money with that of other investors. An investment professional called a portfolio advisor takes that money and invests it for all the investors in a variety of different securities as determined by the investment objectives of the mutual fund. This gives you the benefit of diversification that is, being invested in many different investments at once.
Mutual fund theorem
A result associated with the CAPM, asserting that investors will choose to invest their
Net advantage of refunding
The net present value of the savings from a refunding.
A mutual fund that does not impose a sales commission. Related: load fund
No load mutual fund
An open-end investment company, shares of which are sold without a sales charge.
Not permitted, under the terms of indenture, to be refundable.
NSF (non-sufficient funds)
This appears on your statement if there are insufficient funds in your account to cover a cheque that you have written or a pre-authorized payment that you have already arranged. You will be charged a service fee for non-sufficient funds.
Objective (mutual fund)
The fund's investment strategy category as stated in the prospectus. There are
Also called a mutual fund, an investment company that stands ready to sell new shares to the
Optimization approach to indexing
An approach to indexing which seeks to Optimize some objective, such
Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).
Assets used to pay the pensions of retirees. An investment institution established to manage the assets used to pay the pensions of retirees.
present value index
see profitability index
A measure of the price level calculated by comparing the cost of a bundle of goods and services in a given year with its cost in a base year. See also index.
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
The present value of the future cash flows divided by the initial investment. Also called
See cash value added.
A method for determining the profitability of an investment. It is
Ratio of net present value to initial investment.
profitability index (Pl)
a ratio that compares the present value of net cash flows to the present value of the net investment
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Eligible for refunding under the terms of indenture.
Also called a prerefunded bond, one that originally may have been issued as a general
The redemption of a bond with proceeds received from issuing lower-cost debt obligations
A mutual fund that invests in a specific geographical area overseas, such as Asia or Europe.
Registered Retirement Income Fund (Canada)
Commonly referred to as a RRIF, this is one of the options available to RRSP holders to convert their tax sheltered savings into taxable income.
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
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