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Definition of Pension Fund
Assets used to pay the pensions of retirees. An investment institution established to manage the assets used to pay the pensions of retirees.
A pension plan that has a positive surplus (i.e., assets exceed liabilities).
A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Organizations that invest, including insurance companies, depository institutions,
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,"
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
A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).
An investment company that sells shares like any other corporation and usually does not
Under ERISA, the firm is liable to the plan participants for up to 39% of the net
Interest rate associated with borrowing money.
Indicated yield represents return on a share of a mutual fund held over the past 12
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
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.
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.
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.
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.
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
Pension Benefit Guaranty Corporation (PBGC)
A federal agency that insures the vested benefits of
A fund that is established for the payment of retirement benefits.
A formal agreement between an entity and its employees, whereby the
Organizations that have established a pension plan.
Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.
Quebec Pension Plan
A plan that primarily provides retirement and long-term disability income benefits for residents of Quebec.
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 Pension Plan
Commonly referred to as an RPP this is a tax sheltered employee group plan approved by Federal and Provincial governments allowing employees to have deductions made directly from their wages by their employer with a resulting reduction of income taxes at source. These plans are easy to implement but difficult to dissolve should the group have a change of heart. Employer contributions are usually a percentage of the employee's salary, typically from 3% to 5%, with a maximum of the lessor of 20% or $3,500 per annum. The employee has the same right of contribution. Vesting is generally set at 2 years, which means that the employee has right of ownership of both his/her and his/her employers contributions to the plan after 2 years. It also means that all contributions are locked in after 2 years and cannot be cashed in for use by the employee in a low income year. Should the employee change jobs, these funds can only be transferred to the RPP of a new employer or the funds can be transferred to an individual RRSP (or any number of RRSPs) but in either scenario, the funds are locked in and cannot be accessed until at least age 60. The only choices available to access locked in RPP funds after age 60 are the conversion to a Life Income fund or a Unisex Annuity.
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.
Mutual funds that seek to preserve capital. This type of fund invests primarily in short-term securities with an average term to maturity of one year or less, or in the case of money market funds, 90 days or less.
Sometimes called seg funds, segregated funds are the life insurance industry equivalent to a mutual fund with some differences.The term "Mutual fund" is often used generically, to cover a wide variety of funds where the investment capital from a large number of investors is "pooled" together and invested into specific stocks, bonds, mortgages, etc.
A pool of assets held by the insurer, to back a specific liability to a policyholder. Segregated funds flucuate in value depending on the market value of a specific group of assets the company must maintain separately.
The capital invested in a business by the shareholders, including retained profits.
Single country fund
A mutual fund that invests in individual countries outside the United States.
fund established to retire debt before maturity.
Sinking fund requirement
A condition included in some corporate bond indentures that requires the issuer to
Stopping curve refunding rate
A refunding rate that falls on the stopping curve.
Cash flow available after payment of taxes in the project.
Term Fed Funds
Fed funds sold for a period of time longer than overnight.
Two-fund separation theorem
The theoretical result that all investors will hold a combination of the riskfree
Debt maturing within one year (short-term debt). See: funded debt.
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
spousal RRSP (Canada)
The RRSP rules allow you to contribute to an RRSP for your spouse and claim the deduction yourself. Your total contribution (to your own and your spouse's plan) is still subject to your normal contribution limits, minus any personal pension adjustment and any past service pension adjustment, plus any unused contribution room from prior years and any pension adjustment reversal. Generally, the advantage is that your spouse will ultimately be the one who reports the income for tax purposes when the funds are withdrawn on retirement or otherwise (certain restrictions apply). If your spouse will have a lower income than you when the funds are withdrawn, significantly lower taxes may be payable on the withdrawn amount.
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