Accrued Dividend Amount (ADA)
The amount of dividends accumulated in the fund, but not paid out to investors.
An investment approach that seeks to exceed the average return of the financial markets. Active managers rely on research, market forecasts, and their own judgement and experience in selecting securities to buy and sell.
1. The person or entity with responsibility for investing the assets or providing investment advice to a mutual fund. 2. An employee of an investment firm licensed to provide investment advice.
Basis Points (bps)
One-hundredth of a percentage point (0.01%).
Basket of Shares
For institutional investors, the bundles of securites
exchanged for Exchange-Traded Funds units by the fund company.
The Bid is the highest price a buyer is willing to pay for a security. The Ask is the lowest price at which a seller is prepared to sell a security.
A standard trading amount, usually 100 shares, which has been
agreed upon by stock exchanges.
A certificate of debt issued by a borrower that usually pays a set rate of interest for a specific period of time and featuring a guarantee of repayment of principal in full at maturity.
Search for outstanding performance of individual stocks before considering the impact of economic trends. This investment approach assumes that individual companies can do well, even in an industry that is not performing well.
Capital gain (or loss)
The difference between the price a security is sold at
and its original cost.
Cash that a mutual fund will carry to either meet redemptions or
seize perceived investment opportunities. Cash drag affects performance
because the mutual fund is not fully invested.
A type of fund that has a fixed number of shares usually listed on a major stock exchange. Unlike open-end mutual funds, closed-end funds do not issue and redeem shares on a continuous basis.
Short-term obligations issued by banks, corporations, and other borrowers that are generally not secured by company assets to investors with temporarily idle cash, they are sold at a discount to mature at par value.
The fee charged by a broker to buy or sell stock on behalf of a client.
Common Share / Common Stock
Units of ownership of a public corporation. Owners typically are entitled to vote on the selection of directors and other important matters as well as to receive dividends on their holdings. In the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.
The companies which from time to time are included in
the relevant index.
Core Asset Value
The dollar value of the Index Shares of Constituent
Companies held by the Fund.
Core Asset Value per Unit (CAVPU)
The Core Asset Value divided by the number
of Units outstanding at the time of the calculation.
The opposite side or party in a derivative transaction.
The majority of these funds are closed-end funds which trade on an exchange and invest in a single country.
The smallest block (usually 50,000) of ETF shares that can be
bought or sold from the fund company at net asset value. These are only bought
and sold 'in-kind' meaning that when you sell one, you receive a portfolio of
securities that approximates the ETFs holdings, not cash.
Usually a bank or trust company that holds the cash and securities of a mutual fund for safekeeping.
A debt security of a company similar to a bond but which is typically secured by the general assets of a company, rather than a specific asset.
A contract whose value is based on the performance of an underlying financial asset, index or other investment. Derivatives are available based on the performance of assets, interest rates, currency exchange rates, and various domestic and foreign indexes.
The sale or switch of an investment.
The regular payment of dividends and other income and capital gains from fund investments.
The practice of investing in several different types of
investments over a broad range of industries, sectors, companies, and countries
in order to reduce the risk of one investment performing poorly.
Distribution of earning to shareholders, prorated by class of security.
Ownership interest possessed by shareholders in a corporation - stocks as opposed to bonds.
Estimated Cash per Unit
Cash per unit adjusted for expected dividends and
Exchange-Traded Funds (ETFs)
Similar to conventional mutual funds in that they provide investors with an affordable way to invest in a diversified basket of securities. ETFs can be traded throughout the day at changing market prices.
Fixed Income securities
Investments such as bonds or money market instruments which pay a fixed yield (coupon or interest rate) and feature a guarantee of repayment of principal at maturity.
Purchase or sale of a specific quantity of a commodity, government security, foreign currency, or other financial instrument at the current or spot price, with delivery and settlement at a specified future date.
An agreement to buy or sell a specified amount of a commodity or financial instrument at a particular price on a stipulated future date. The price is established between buyer and seller on the floor of a commodity exchange.
Guaranteed Investment Certificate (GIC)
Deposit instrument most commonly available from bank and trust companies, requiring a minimum investment at a pre-determined rate of interest for a stated term and feature a guarantee of repayment of principal at maturity.
A strategy used to offset investment risk by locking in the price of
an asset, commodity or currency to protect against future negative price
A benchmark against which investment performance is measured. The S&P/TSX Composite Index is an example.
A pool of investment money passively managed by professionals and invested in all the stocks in a particular index with the goal of mirroring the return of the index.
Index Participation Units
Shares of a fund that trade on a major stock exchange. Like index mutual funds, index participation units are designed to match the performance of a certain index by investing in the constituent companies included in that index. Like the stocks in which they invest, shares can be traded throughout the trading day.
Investment style which seeks to replicate index benchmarks in equity and bond markets.
The ease with which an investment can be converted to cash.
Management Expense Ratio (MER)
The total of all fees and expenses paid or
payable by a mutual fund expressed as a percentage of the average Net Asset
Value of the fund during the year.
A percentage paid out of fund assets to the manager for investment management and administrative services.
The entity responsible for providing investment management and administrative services to a mutual fund.
The amount a broker will lend a client to purchase securities.
A vehicle used to denote trends in the securities markets. The
most popular in Canada is the Toronto Stock Exchange 300 Composite Index (TSE
In the case of a security, market price is usually considered
the last reported price at which the stock or bond is sold.
Money Market Instruments
Short-term debt securities maturing in one year or less. These include treasury bills, bankers' acceptances, commercial paper, discount notes and guaranteed investment certificates.
An investment entity that pools shareholder or unitholder funds
and invests in various securities. The units or shares are redeemable by the
fund on demand by the investor. The value of the underlying assets of the fund
influences the current price of units.
Net Asset Value (NAV)
The market value of the securities held in a mutual fund plus any current assets less its current liabilities.
Net Asset Value per Unit (NAVPU)
The Net Asset Value of the Fund divided by
the total number of Units outstanding.
Unsecured written promise to pay a specified amount to a certain entity on demand or on a specified date.
An agreement which allows the holder to buy or sell a specified security at a specified price by a certain date.
A low-cost investment strategy in which a fund attempts to match - rather than outperform - a particular stock or bond market index. Also known as indexing.
All the securites which an investment company or an individual
A security in a company, which entitles the owner to certain specified rights (notably the right to receive dividends) "in preference" to the rights of holders of common shares.
The specified number of units which will be issued or
redeemed by a Fund for a Basket of Shares.
Rate of Return
The profit realized from an investment, calculated as a percentage of the cost of the investment. It is most often expressed on an annual basis.
The sale of mutual fund units back to the mutual fund.
An investor's ownership in a series of a mutual fund.
The sale of a security which the seller does not own in the belief that
it will fall in value.
Agreement between two or more parties to exchange the income of streams of two (or more securities) without exchanging the underlying securities.
The trading symbol assigned by an exchange to a particular security.
Method in which an investor looks at trends in the general economy, and next selects industries and then companies that should benefit from those trends.
Measures the difference in performance between an Exchange
Traded Fund and the underlying benchmark.
Cost of buying or selling a security.
The portfolio investments are always visible enabling
more informed invesment decision making.
A short-term government debt investment, also referred to as a "T-bill". Treasury bills are sold at a discount and then mature at their par value. The difference between the issue price and the par value is in effect the interest payment.
A fiduciary relationship in which a person called a trustee, holds title to property for the benefit of another person, called a beneficiary.
The administrator of a trust.
The Toronto Stock Exchange.
For TD Mutual Funds, each day on which a net asset value per Series unit is determined for a Fund. Net asset values are generally determined at 4 p.m. Eastern Time each day that TD Bank is open for business at its main branch in Toronto but can be determined at any other time.