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IBC Financial Averages An average for all major money market mutual fund yields. |
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Income The money derived from an investment, through interest, dividends, or capital gains. |
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Income Dividend Regular payments from mutual funds to their shareholders, composed of dividends, interest, and short-term capital gains earned from the fund’s portfolio of securities. May be distributed annually, biannually, quarterly, or monthly, with operating expenses deducted. |
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Income Fund A mutual fund that seeks current income rather than growth of capital. Income funds typically invest in bonds and/or high-yielding stocks. |
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Income Risk The possibility that the income provided by a fund will fluctuate due to changing interest rates. |
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Index Fund A mutual fund that seeks to parallel the performance of a particular stock or bond index, for example the S&P 500. To achieve this goal, such funds may actually invest in many of the individual securities which compose the index. |
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Inflation A rise in the prices of goods and services which occurs when economic demand exceeds supply. When an economy is growing there is a demand for products and services greater than what is available. This situation causes costs to rise. Over time, even with a relatively low inflation rate, the purchasing power of a dollar is reduced. Things cost more; your dollar buys less. |
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Inflation Risk The risk that the real value of your investments, as expressed in constant dollars, will decline because of inflation. Generally, the most conservative investments provide the lowest returns over time and are more prone to inflation risk. |
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Interest and Short-Term Income Distributions Regular payments from a mutual fund to its shareholders made up of any dividends, interest and short-term capital gains earned from the fund's portfolio of securities. |
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International Fund International mutual funds invest primarily in securities issued by corporations, governments, and banks outside the U.S., in developed and emerging markets. International funds may be more volatile than domestic funds because of conditions not usually associated with investing in the United States. |
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Investment Adviser An individual or organization that manages a portfolio and makes day-to-day investment decisions regarding the purchase or sales of securities. Also called a portfolio manager. |
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Investment Horizon The length of time an investor expects to keep a sum of money invested. |
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Investment Income Interest and dividends paid to investors. |
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Investment Objective The financial goal that an investor or a mutual fund pursues. |
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