Annual Rate of Return

Annual Rate of Return The annual rate of gain or loss on an investment expressed as a percentage.

Asset Allocation

Asset Allocation; The diversification of investments among several asset classes, such as stocks, bonds, and short-term investments (e.g., cash equivalents). Proper asset allocation may limit risk and increase opportunities.

Average Portfolio Maturity (APM)

Average Portfolio Maturity The average maturity of all the bonds in a bond fund’s portfolio.

Brokerage Window

Brokerage Window An investment option giving plan participants and beneficiaries the ability to setup self-directed brokerage accounts to select investments beyond those designated by a retirement plan

Capital Appreciation Fund (CAF)

Capital Appreciation Fund An investment fund that seeks growth in share prices by investing primarily in stocks whose share prices areexpected to rise. Capital Gain Any gain realized from the sale of a capital asset.

Capital Loss

Capital Loss; The loss in the value of an investment, calculated by the difference between the purchase price and the net sale price.

Certificates of Deposit (CDs)

Certificates of Deposit (CDs) Money deposited in a financial institution for a set period of time at a specified interest rate. The risk of losing principal with CDs issued by federally insured institutions is very low.

Closed-end Fund

Closed-end Fund A type of investment company that does not continuously offer new shares for sale but instead sells a fixed number of shares at one time in the initial public offering (IPO). After a fund’s IPO, its shares typically trade on a secondary market, such as the New York Stock Exchange. Legally known as a “closed-end company.”

Company Stock Fund (CSF)

Company Stock Fund; A fund that invests primarily in employer securities and may also maintain a cash position for liquidity purposes. Competing Funds An investment fund that is identified by the investment manager of another fund and is subject to special rulesrelating to an investor’s ability to buy and sell investments between the two funds. See Equity Wash Restriction

Compound Interest [CI]

Compound Interest; Interest earned not only on the original investment but on its accrued earnings as well. Conservative An investment approach thataccepts lower rewards in return for potentially lower risks.