GlossaryGuide

The profit earned by a company after all expenses and taxes have been deducted from revenue. A simple way to think about net income is it’s the price of a widget multiplied by the number of widgets sold (this result is revenue) minus the cost to make and sell the widgets, other expenses and any interest or… Continue reading NET INCOME

“Net asset value,” or “NAV,” of an investment company is the company’s total assets minus its total liabilities. For example, if an investment company has securities and other assets worth $100 million and has liabilities of $10 million, the investment company’s NAV will be $90 million. Because an investment company’s assets and liabilities change daily, NAV will… Continue reading NET ASSET VALUE

Prior to July 1, 2009, a Nationally Recognized Municipal Securities Information Repository (NRMSIR) was an entity, designated by the Securities and Exchange Commission, to which an issuer of municipal securities or an obligated person that entered into a continuing disclosure agreement was contractually required to send annual financial information and disclosures of certain events relating… Continue reading NATIONALLY RECOGNIZED MUNICIPAL SECURITIES INFORMATION REPOSITORIES (NRMSIRS)

A “national securities exchange” is a securities exchange that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934.  For a complete list of national securities exchanges and recently approved exchange applications please check here.

This year’s top-performing mutual funds aren’t necessarily going to be next year’s best performers. It’s not uncommon for a fund to have better-than-average performance one year and mediocre or below-average performance the following year. That’s why the SEC requires funds to tell investors that a fund’s past performance does not necessarily predict future results. You… Continue reading MUTUAL FUNDS, PAST PERFORMANCE

A mutual fund is an open-end investment company or fund.  An open-end fund is one of three basic types of investment companies. The other two types of investment companies are closed-end funds and unit investment trusts (UITs). Exchange-traded funds (ETFs) are generally also structured as open-end funds, but can be structured as UITs as well. A mutual fund continuously pools money from many… Continue reading MUTUAL FUNDS

A mutual fund company generally must pay redemption proceeds to a shareholder within seven days of receiving a redemption request from the shareholder. Exceptions apply on days when the New York Stock Exchange is closed, during certain emergencies, or when the SEC issues an order delaying redemptions to protect shareholders in the fund.

Mutual funds must provide a copy of the fund’s prospectus to shareholders after they purchase shares, but investors can – and should – request and read the fund’s prospectus before making an investment decision. There are two kinds of prospectuses: (1) the statutory prospectus; and (2) the summary prospectus. The statutory prospectus is the traditional,… Continue reading MUTUAL FUND PROSPECTUS

As with any business, running a mutual fund involves costs. For example, there are costs incurred in connection with particular investor transactions, such as investor purchases, exchanges, and redemptions. There are also regular fund operating costs that are not necessarily associated with any particular investor transaction, such as investment advisory fees, marketing and distribution expenses, brokerage fees,… Continue reading MUTUAL FUND FEES AND EXPENSES

Some mutual funds offer investors different types of shares, known as “classes.”  Each class invests in the same portfolio of securities and has the same investment objectives and policies.  But each class has different shareholder services and/or distribution arrangements with different fees and expenses.  Because of the different fees and expenses, each class will likely have… Continue reading MUTUAL FUND CLASSES