Gl os sar y

Adv iso r
The organization employed by a mutual fund to give professional advice on the fund's
investments and to supervise the management of its assets.

Ask ed or Off er in g Pric e

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.

Ass et Al locat ion 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 of these funds keep the proportions allocated between different sectors relatively
constant, while others alter the mix as market conditions change.

Auto mat ic Re inve st me nt

A service offered by most mutual funds whereby income dividends and capital gain
distributions are automatically invested into the fund by buying additional shares and thus
building up holdings through the effects of compounding.

Ba lanc ed Fund
A mutual fund that maintains a balanced portfolio, generally 60% bonds or preferred stocks
and 40% common stocks.

Bid or Se ll Pric e
The price at which a mutual fund's shares are redeemed (bought back) by the fund. The bid
or redemption price means the current net asset value per share, less any redemption fee or
back-end load.

Bo nd Fund
A mutual fund whose portfolio consists primarily of corporate, municipal or U.S. Government
bonds. These funds generally emphasize income rather than growth.

Bo nd Rati ng
System of evaluating the probability of whether a bond issuer will default. Standard and
Poor's Corp. and Moody's Investors Services, among other firms, analyze the financial
stability of both corporate and government bond issuers. Ratings range from AAA or Aaa
(extremely unlikely to default) to D (currently in default). Bonds rated BBB or below by S&P
or Baa or below by Moody's are not considered to be of investment grade. Mutual funds
generally restrict their bond purchases to issues of certain quality ratings, which are specified
in their prospectuses.
Ca pi tal App rec iat ion Fund
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.

Ca pi tal Gai ns Dis tribut ion s

Payments (usually annually) to mutual fund shareholders of gains realized on the sale of
portfolio securities.

Ca pi tal Grow th
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.

Cer tif icat e of Dep os it

Interest-bearing, short-term debt instrument issued by banks and thrifts.

Clos ed- End Inv es tm en t Co mpa ny

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.

Co mme rc ial Pap er

Short-term, unsecured promissory notes with maturities no longer than 270 days. They are
issued by corporations, in denominations starting at $10,000, to fund short-term credit needs.

Co mmon Stock Fund

An open-end investment company whose holdings consist mainly of common stocks and
usually emphasize growth.

Co nfir m Date
The date the fund processed your transaction, typically the same day or the day after your
trade date.

Co nt ing en t Def er red Sale s Char ge (CDSC)

A fee (or back-end load) imposed by certain funds on shares redeemed within a specific
period following their purchase. These charges are usually assessed on a sliding scale, such as
four percent to one percent of the amounts redeemed, with the fee reduced each year the
units are held.

Cus tod ian

The bank or trust company that maintains a mutual fund's assets, including its portfolio of
securities or some record of them. Provides safekeeping of securities but has no role in
portfolio management.
Dai ly Divi de nd Fund
This term applies to funds that declare their income dividends on a daily basis and reinvest or
distribute monthly.

Def er re d Comp en sa tio n Plan

A tax-sheltered investment plan to which employees of state and local governments can defer
a percentage of their salary.

Di st ributor
An individual or a corporation serving as principal underwriter of a mutual fund's shares,
buying shares directly from the fund, and reselling them to other investors.

Div er sif icat ion

The policy of spreading investments among a range of different securities to reduce the risks
inherent in investing.

Rup ee- Cos t Ave ragi ng

The technique of investing a fixed sum at regular intervals regardless of stock market
movements. This reduces average share costs to the investor, who acquires more shares in
periods of lower securities prices and fewer shares in periods of high prices. In this way,
investing risk is spread over time.

Exchan ge Priv il eg e (O r swi tchi ng priv il eg e)

The right to transfer investments from one fund into another, generally within the same fund
group, at nominal cost.

Ex-Div ide nd Dat e

The date on which a fund's Net Asset Value (NAV) will fall by an amount equal to the
dividend and/or capital gains distribution (although market movements may alter the fund's
closing NAV somewhat). Most publications which list closing NAVs place an "X" after a fund’
name on its ex-dividend date.

Ex pe ns e Rat io
The ratio of total expenses to net assets of the fund. Expenses include management fees,
12(b)1 charges, if any, the cost of shareholder mailings and other administrative expenses.
The ratio is listed in a fund's prospectus. Expense ratios may be a function of a fund's size
rather than of its success in controlling expenses.

Fan ni e Mae (Fed era l Mor tga ge Asso cia tion )

An agency established by the federal government, but owned by private stockholders, which
issues mortgage-backed certificates in $25,000 denominations. Timely payment of both
interest and principal are insured. A growing number of mutual funds emphasize investments
in these and other mortgage-backed securities.
Fi sca l Yea r
An accounting period consisting of 12 consecutive months.

Global Fund
A fund that invests in both Indian. and foreign securities.

Grow th F un d
A mutual fund whose primary investment objective is long-term growth of capital. It invests
principally in common stocks with significant growth potential.

Inco me Divid en d
Payment of interest and dividends earned on the fund's portfolio securities after operating
expenses are deducted.

Inco me F und
A mutual fund that primarily seeks current income rather than growth of capital. It will tend
to invest in stocks and bonds that normally pay high dividends and interest.

Ind ex Fund
A mutual fund that seeks to mirror general stock-market performance by matching its
portfolio to a broad-based index, most often the Standard & Poor's 500-stock index.

In te rnat iona l Fund

A fund that invests in securities traded in markets outside India.

Inv es tm en t Com pan y

A corporation, partnership or trust that invests the pooled monies of many investors. It
provides greater professional management and diversification of investments than most
investors can obtain independently. Mutual funds, or "open-end" investment companies, are
the most popular form of investment company.

Inv es tm en t Obj ec tiv e

The financial goal (long-term growth, current income, etc.) that an investor or a mutual fund
pursues.

Junk Bo nd
A speculative bond rated BB or below by Standard & Poor's Corp. and Ba or below by
Moody's Investor Service. "Junk bonds" are generally issued by corporations of questionable
financial strength or without proven track records. They tend to be more volatile and higher
yielding than bonds with superior quality ratings. "Junk bond funds" emphasize diversified
investments in these low-rated, high-yielding debt issues.
Load
A sales charge or commission assessed by certain mutual funds ("load funds,") to cover their
selling costs. The commission is generally stated as a portion of the fund's offering price,
usually on a sliding scale from one to 8.5%.

Load Fund
A mutual fund that levies a sales charge up to 8.5%, which is included in the offering price of
its shares, and is sold by a broker or salesman. A front-end load is the fee charged when
buying into a fund; a back-end load is the fee charged when getting out of a fund.

Low-Load F und
A mutual fund that charges a small sales commission, usually 3.5% or less, for the purchase of
its shares.

Ma nag em en t Fe e
The amount a mutual fund pays to its investment adviser for services rendered, including
management of the fund's portfolio. In general, this fee ranges from .5% to 1% of the fund's
asset value.

Mo ne y Mark et F und
A mutual fund that aims to pay money market interest rates. This is accomplished by
investing in safe, highly liquid securities, including bank certificates of deposit, commercial
paper, government securities and repurchase agreements. Money Market funds make these
high interest securities available to the average investor seeking immediate income and high
investment safety.

Mo rt gage- Back ed Securi ti es

Certificates backed by pooled mortgages (e.g., Freddie Mac or Ginnie Mae). Issuing agencies
buy mortgages from lending institutions and repackage them as securities that they sell to
investors. They are generally issued in denominations of $25,000 or above. Yields, which
stem from interest and principal on underlying mortgages, are generally higher than those of
Treasury bonds that provide comparable liquidity and safety. A growing number of income
mutual funds concentrate their holdings in these securities.

Mun ic ipa l Bond F und

A mutual fund that invests in a broad range of short, intermediate or long-term tax-exempt
bonds issued by states, cities and other local governments. The interest obtained from these
bonds is passed through to shareholders free of tax. The objective of these funds is current
tax-free income.

Mutua l Fund
An open-end investment company that buys back or redeems its shares at current net asset
value. Most mutual funds continuously offer new shares to investors.
Ne t A ss et Value Per Shar e
The current market worth of a mutual fund share. Calculated daily by taking the funds total
assets securities, cash and any accrued earnings deducting liabilities, and dividing the
remainder by the number of shares outstanding.

No-Load F un d
A commission-free mutual fund that sells its shares at net asset value, either directly to the
public or through an affiliated distributor, without the addition of a sales charge.

Opt ion Inco me F und

A fund that invests primarily in dividend-paying common stocks on which call options are
traded on national securities exchanges. These funds seek high current return consisting of
dividends, premiums from selling options, net short-term gains (including those from the
exercising of options) and any profits from closing purchase transactions.

Payabl e Dat e
The date on which distributions are paid to shareholders who do not want to reinvest them.
This date can be anywhere from one week to one month after the Record Date.

Payro ll Deduct ion Plan

An arrangement between an employer and a mutual fund, authorized by the employee,
through which a specified sum is deducted from an employee's salary to buy shares in the
fund.

Por tfol io Turnov er R at e

The rate at which the fund's portfolio securities are changed each year. If a fund's assets total
$100 million and the fund bought and sold $100 million worth of securities that year, its
portfolio turnover rate would be 100%. Aggressively managed funds generally have higher
portfolio turnover rates than do conservative funds that invest for the long term. High
portfolio turnover rates generally add to the expenses of a fund.

Pro sp ec tus
An official document that each investment company must publish, describing the mutual
fund and offering its shares for sale. It contains information required by the Securities and
Exchange Commission.

Re cord Dat e
The date the fund determines who its shareholders are; "shareholders of record" who will
receive the fund's income dividend and/or net capital gains distribution. Frequently the
business day immediately prior to the Ex-Dividend Date.

Re de mp tio n Fe e
A fee charged by a limited number of funds for redeeming, or buying back, fund shares.

Re de mp tio n Pric e
The price at which a mutual fund's shares are redeemed (bought back) by the less expensive
fund. The redemption price is usually equal to the current net asset value per share.

Re gio nal F und

A mutual fund that concentrates its investments within a specific geographic area, usually the
fund's local region. The objective is to take advantage of regional growth potential before the
national investment community does.

Re inv es tm en t Dat e (Payabl e Date )

The date on which a share's dividend and/or capital gains will be reinvested (if requested) in
additional fund shares.

Re inv es tm en t Pr ivi le ge
A service that most mutual funds offer whereby a shareholder's income dividends and capital
gains distributions are automatically reinvested in additional shares.

Sector F und
A fund that operates several specialized industry sector portfolios under one umbrella.
Transfers between the various portfolios can usually be executed by telephone at little or no
cost.

Seri es F un d
A mutual fund whose prospectus allows for more than one portfolio. Portfolios may be
specialized (Sector Fund) or broad (growth stock, along with a money market portfolio).
Management can create additional portfolios as it sees fit.

Shor t Sel li ng
The sale of a security which is not owned by the seller. The "short seller" borrows stock for
delivery to the buyer, and must eventually purchase the security for return to the lender.

Shor t-Te rm Mun ic ipa l Bon d F un d

A fund that invests in municipal bonds with maturities not exceeding two years. See
Municipal Bond Fund.

Si mp li fi ed Emp loy ee Pen sio n

An alternative to a Keogh plan that allows employers who have not established qualified
retirement plans to contribute to their employee’s Individual Retirement Accounts.

Sp ec ial ty Fund
A mutual fund specializing in the securities of a particular industry or group of industries or
special types of securities.
Sy st ema tic Withd rawal Plans
Many mutual funds offer withdrawal programs whereby shareholders receive payments from
their investments. These payments are usually drawn from the fund’s dividend income and
capital gain distributions, if any, and from principal only when necessary.

Un derw ri te r
The organization that acts as the distributor of a mutual fund's shares to broker/dealers and
the public.
Var iabl e An nui ty
A type of insurance contract that guarantees future payments to the holder, or annuitant,
usually at retirement. The annuity's value varies with that of the underlying portfolio
securities, which may include mutual fund shares. All monies held in the annuity accumulate
tax-deferred.

Vo lun tary Pla n

A flexible plan for capital accumulation, involving no specified time frame or total sum to be
invested.
Yie ld
Income or return received from an investment, usually expressed as a percentage of market
price, over a designated period. For a mutual fund, yield is interest or dividend before any
gain or loss in the price per share.

Ze ro Coupon Bo nd
Bond sold at a fraction of its face value. It appreciates gradually, but no periodic interest
payments are made. Earnings accumulate until maturity, when the bond is redeemable at full
face value. Nonetheless, interest is taxable as it accrues. As a result, zero coupon bonds are
often used for IRAs, Keoghs and other tax-deferred retirement plans.