Asset Mix [ Back To Top ]
Assets are distributed among stocks, bonds, and money-market instruments (treasury bills, certificates of deposit, short-term government bonds, and commercial paper).

Back-End Load [ Back To Top ]
A charge for withdrawing shares from a mutual fund.

Balanced Mutual Fund [ Back To Top ]
An investment fund that usually includes bonds, debentures, or preferred shares, in varying ratios with common stocks.

Bear Market [ Back To Top ]
A prolonged period of falling prices. A bear market in stocks is usually brought on by the anticipation of declining economic activity, and a bear market in bonds is caused by rising interest rates.

Bond Mutual Fund [ Back To Top ]
An investment fund predominantly made up of bonds and debentures.

Bonds [ Back To Top ]
Certificates issued by borrowers, usually governments or corporations. A bond will normally have a fixed interest rate and a set maturity date, at which time the principal will be repaid in full. A typical bond will have interest coupons attached which are redeemed annually or semi-annually.

Broker [ Back To Top ]
A person who acts as an intermediary in the purchase of securities or insurance.

Bull Market [ Back To Top ]
A prolonged rise in the prices of stocks, bonds, or commodities. Bull markets may last from a few months to several years and are characterized by high trading volume.

Capital Cost Allowance [ Back To Top ]
A tax deduction for the depreciation of various types of assets.

Capital Gains [ Back To Top ]
The difference between the buy and sell price of an asset. The capital gain on stocks purchased for $1,000 and sold for $1,450 would be $450.

Closed-End Mutual Fund [ Back To Top ]
A fund in which the total number of shares is fixed. After the initial offer, the shares can be acquired only from another owner. Share prices are set by supply and demand, not net asset value, and are traded on a stock exchange.

Commercial Paper [ Back To Top ]
Short-term debt securities issued by corporations, banks, and other borrowers.

Common Share [ Back To Top ]
A security representing part ownership in a company, generally carrying the right to vote on major decisions and to receive dividends.

Coupons [ Back To Top ]
Certificates attached to a bond that can be redeemed for interest payments at regular intervals.

Debenture [ Back To Top ]
General debt obligation backed only by the integrity of the borrower. An unsecured bond is a debenture.

Deposit Insurance [ Back To Top ]
Protection of certain types of assets against loss. Bank and trust company deposits are covered by the Canada Deposit Insurance Corporation (CDIC) up to a maximum of $60,000. Mutual funds are not covered by deposit insurance.

Derivatives [ Back To Top ]
Investments that derive their value from underlying assets such as currencies, treasury bills, and bonds or are linked to indices such as a stock market index. Derivatives can be used to speculate on market movements or to protect investments against major swings in market prices.

Distribution Company [ Back To Top ]
A company that has the exclusive right to offer shares of one or more investment funds to the public, directly, or through other investment fund dealers or brokers.

Distribution Fees [ Back To Top ]
Assessments levied by some mutual fund companies on the value of units purchased through a back-end load sales option.

Diversification [ Back To Top ]
An investment technique intended to minimize risk by placing money in a number of securities. In a diversified portfolio, a decline in the value of one stock, for example, would not dramatically affect the overall value of the holdings.

Dividend Tax Credit [ Back To Top ]
A tax credit intended to reduce the effective rate paid on dividend income.

Dividends [ Back To Top ]
Payments made to shareholders of a company in the form of cash or additional shares.

Equities [ Back To Top ]
Common and preferred shares, representing a share in the ownership of a company.

Equity Mutual Fund [ Back To Top ]
An investment fund consisting primarily of common shares, the objective of which is to participate fully in the growth of an economy.

Financial Planners [ Back To Top ]
Professionals who specialize in preparing financial programs for individuals, covering such matters as investments, tax planning, retirement preparation, estate planning, and income generation. Some charge an hourly fee while others make their revenue through commissions on the sale of securities, including mutual funds.

Fixed Income Mutual Fund [ Back To Top ]
A fund that invests in securities which pay interest at a fixed rate, such as bonds.

Front-End Load [ Back To Top ]
The commission charged when mutual fund units are bought.

Global Mutual Fund [ Back To Top ]
A fund that invests in several countries, including its home nation. The fund may specialize in stocks, bonds, or money-market instruments.

Growth Fund [ Back To Top ]
An investment fund that seeks growth of capital as its primary objective. This type of fund invests primarily in common stocks and securities convertible into common stocks.

Guaranteed Investment Certificates (GICs) [ Back To Top ]
Securities issued by financial institutions, such as banks and trust companies, for a specified term. GICs of up to five years issued by members of the CDIC are covered by deposit insurance up to $60,000.

Hedge [ Back To Top ]
A strategy used by fund managers to limit investment risk.

Income Fund [ Back To Top ]
An investment fund whose primary objective is current income. Such funds generally invest their assets in government, corporate, or other bonds. Some income funds may include high-yielding common stocks.

International Mutual Fund [ Back To Top ]
A fund that invests in many countries but not its own.

Investment Objective [ Back To Top ]
A fund's (or investor's) goal. Investment strategies can be designed to generate long-term growth, current income, or other goals.

Investment Portfolio [ Back To Top ]
Securities owned by an individual consisting of a combination of stocks, bonds, and other types of securities.

Leveraging [ Back To Top ]
Borrowing money for investment purposes.

Liquidity [ Back To Top ]
The ability to convert a security to cash quickly.

Load [ Back To Top ]
The fee charged by a mutual fund to investors to buy units (front-end load or acquisition fee) or sell units (back-end load or redemption fee).

Management Company [ Back To Top ]
The business entity that establishes, promotes, and manages a fund or funds, each of which is a separate entity with its own board of directors or trustee(s).

Management Fee [ Back To Top ]
The fee paid to a fund's manager for investment management and certain administrative services.

Money-Market Mutual Fund [ Back To Top ]
An investment fund, the portfolio of which is invested in large denominations of short-term paper (generally maturing in less than six months), designed to provide high yields with no loss of capital.

Mutual Funds [ Back To Top ]
Pools of investment money, managed by professionals, and invested in a wide range of securities.

Net Asset Value (NAV) [ Back To Top ]
The value of mutual fund shares. It is normally calculated daily by subtracting a fund's liabilities from its assets and dividing by the number of shares outstanding.

No-Load Mutual Fund [ Back To Top ]
A fund offered to the public that carries no purchase fee (front-end load) or redemption fee (back-end load).

Portfolio [ Back To Top ]
The combined holdings of more than one stock, bond, commodity, real-estate investment, cash, or other asset by an individual or institutional investor. The purpose of a portfolio is to reduce risk by diversification.

Principal [ Back To Top ]
The amount of money you invest.

Prospectus [ Back To Top ]
The selling document legally required to be distributed to mutual fund investors. A prospectus describes a fund's investment strategy as well as the risks and costs of the investment.

Redemption [ Back To Top ]
The right of a shareholder to sell, at any time, some or all of his or her shares back to the investment fund for cash.

Registered Investment [ Back To Top ]
Any security that is held in a tax-sheltered plan approved by Revenue Canada.

Registered Retirement Income Fund (RRIF) [ Back To Top ]
A fund set up with proceeds from an RRSP to provide income during retirement.

Registered Retirement Savings Plan (RRSP) [ Back To Top ]
A plan registered with Revenue Canada that encourages Canadians to save for retirement by providing tax relief on contributions and earnings.

Return [ Back To Top ]
The amount of money earned by an investment.

Risk [ Back To Top ]
The measurable possibility of losing or not gaining value. Risk is differentiated from uncertainty, which is not measurable.

Sales Charge [ Back To Top ]
The amount of commission paid by an investor to a sales organization.

Share [ Back To Top ]
A unit of ownership in a company.

Shareholder [ Back To Top ]
Someone who owns one or more shares in a company.

Stock [ Back To Top ]
Ownership in a corporation represented by shares that are a claim on the corporation's earnings and assets. Common stock usually entitles the shareholder to vote in the election of directors and other matters taken up at shareholder meetings or by proxy. Preferred stock generally does not confer voting rights but it has a prior claim on assets and earnings (dividends must be paid on preferred stock before any can be paid on common stock).

Switching [ Back To Top ]
Moving money from one mutual fund to another.

Total Return [ Back To Top ]
The total amount any investment returns, including any capital gains or losses and any dividends or interest.

Trailer Fee [ Back To Top ]
An annual service commission paid by mutual fund companies to sales representatives. These fees generally range between 0.25% and 1% of customers' assets and are paid out of the fund's management expenses.

Transfer Fee [ Back To Top ]
The price charged to transfer your assets to another company.

Treasury Bills [ Back To Top ]
Short-term debt securities issued most commonly by the federal government.

Unitholder [ Back To Top ]
Someone who holds one or more units in a mutual fund.

Volatility [ Back To Top ]
The amount by which a fund's return varies over time; used as a measure of investment risk.

Yield [ Back To Top ]
Income, usually interest, paid by a security on a regular basis.