Tag: mutual

Withdrawal Plan definition explanation

What is Withdrawal Plan?
1) A payment structure arranged with a mutual fund in which the investor receives a set amount of funds from the fund on a periodic basis. This is also called a “”systematic withdrawal plan””.

2) Any strategy in which an investor liquidates a portion of their portfolio and extracts cash periodically, such as an investor selling equity shares every year to help supplement their retirement. Read more for examples and further explanation including related video clips and also comments
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Private Placement definition explanation

What is Private Placement?
Raising of capital via private rather than public placement. The result is the sale of securities to a relatively small number of investors. Investors involved in private placements are usually large banks, mutual funds, insurance companies, and pension funds. Read more for examples and further explanation including related video clips and also comments
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Equity Style Box definition explanation

What is Equity Style Box?
A visual representation of the principle investment characteristics of stocks and stock mutual funds. The style box was created by Morningstar and is a valuable tool for investors to use to determine the risk-return structures of their stocks/stock portfolios and/or how these investments fit into their investing criteria

Also known as a “”stock style box””. Read more for examples and further explanation including related video clips and also comments
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Service Shares definition explanation

What is Service Shares?
Mutual fund units that charge service fees to their shareholders. The purpose of these fees is to compensate individuals who answer investor inquiries and provide information to the public or to investors about the fund. FINRA (formerly the NASD) limits funds from charging service fees in excess of 0.25% of their average net assets per year. Read more for examples and further explanation including related video clips and also comments
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Capital Gain definition explanation

What is Capital Gain?
1. An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short term (one year or less) or long term (more than one year) and must be claimed on income taxes. A capital loss is incurred when there is a decrease in the capital asset value compared to an asset’s purchase price.

2. Profit that results when the price of a security held by a mutual fund rises above its purchase price and the security is sold (realized gain). If the security continues to be held, the gain is unrealized. A capital loss would occur when the opposite takes place. Read more for examples and further explanation including related video clips and also comments
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Gold Fund definition explanation

What is Gold Fund?
A mutual fund or exchange-traded fund (ETF) that invests primarily in gold-producing companies or gold bullion. The price of shares within a gold fund should correlate very closely to the spot price of gold itself, assuming the fund holds the majority of its assets in bullion or in the stocks and bonds of gold miners and manufacturers. Read more for examples and further explanation including related video clips and also comments
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Foul Weather Fund definition explanation

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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