A-Share
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In a family of multi-class mutual funds, this is the class that is characterized by a front load structure. Not all fund companies follow this class structure; however, it is the prominent method of distinction.
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Source:
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403bCompare.com
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Accelerated Benefit Provision (Terminal Illness, Nursing Home)
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A provision in many new policies which will allow the policy owner to receive a portion of the death benefit early if the insured person is diagnosed with a terminal illness or permanently confined to a nursing home.
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Source:
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California Department of Insurance
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Account Fee
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A fee that some funds separately impose on investors for the maintenance of their accounts. For example, accounts below a specified dollar amount may have to pay an account fee.
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Source:
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United States Securities and Exchange Commission
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Active (Actively Managed)
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Funds with an investment adviser who continually researches, monitors and actively trades the holdings of the fund to seek a higher return than the market.
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Source:
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United States Department of Labor
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Administrative Fee
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Charges to cover record-keeping and other administrative expenses. This may be charged as a flat account maintenance fee or as a percentage of account value.
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Source:
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United States Securities and Exchange Commission
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Annual Rate of Return
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Annual return on an investment. Rate of return may refer to the dividend yield or it may refer to the total return rate.
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Source:
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National Association of Securities Dealers, Inc.
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Annual Reset (Rachet)
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Compares the change in the index from the beginning to the end of each year. Any declines are ignored.
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Source:
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United States Securities and Exchange Commission
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Annuitization
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Choosing regular income payments for life or some other defined period.
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Source:
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Ohio Department of Insurance
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Annuitization Bonus
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An annuitization bonus encourages you to keep your funds with the company at maturity.
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Source:
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Ohio Department of Insurance
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Annuity
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There are two types of annuities:The first is when you pay a lump sum to a life insurance company, and they pay it out to you right away in periodic installments. This type is known as an immediate annuity - the payments to you start immediately. The second, and more common, is where money paid by you accumulates at interest over a period of time. If you choose, the accumulated amounts will then be paid out to you in periodic installments, usually when you retire, in order to supplement your retirement income. This type is known as a deferred annuity - the payments to you are deferred for a number of years. Currently, a deferred annuity may have tax advantages, in that the interest credited to your funds is deferred from current taxation. That is to say, income tax is not owed until you start receiving distributions from the annuity.
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Source:
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California Department of Insurance
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Annuity Certain (Period Certain Annuity)
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A type of annuity in which the insurance company will pay you an income for a specified amount of time (5 years, 10 years, 20 years, etc.). In a Life Annuity with Period Certain, the company will pay you an income for as long as you live, but if you die before the period certain that you choose, the income will be paid to a survivor you designate until the end of that period.
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Source:
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California Department of Insurance
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Asset Allocation
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The process of investing money in predetermined proportions in different types of assets to create a collection of assets with the desired expected return and the desired expected risk characteristics.
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Source:
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LOMA's Glossary of Insurance and Financial Services Terms Copyright c 2002 LOMA (Life Office Management Association, Inc.). Used with permission from the publisher. All rights reserved.
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Asset Class
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A group of similar investment instruments linked by related risk and return features.
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Source:
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LOMA's Glossary of Insurance and Financial Services Terms Copyright c 2002 LOMA (Life Office Management Association, Inc.). Used with permission from the publisher. All rights reserved.
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Average Annual Return (AAR)
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The most common basis for stating the historical return of a mutual fund, AAR is stated after expenses.
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Source:
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American Stock Exchange
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Average Annual Yield
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Average yearly income on an investment.
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Source:
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Foundation for Investors Education
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