Net Asset Value NAV Definition Formula Example and Uses

Net Asset Value (NAV): Definition, Formula, Example, and Uses Net Asset Value (NAV) is a financial metric used to determine the value of a mutual fund or an investment company. It represents the per-share value of the fund’s assets minus its liabilities. NAV is calculated daily and is an important …

NAV Return Definition Calculation Vs Market Return

NAV Return Definition Calculation The Net Asset Value (NAV) return is a calculation used to determine the performance of a mutual fund. It is a measure of the change in the value of the fund’s assets over a specific period of time. The NAV return is often used by investors …

Mutual Funds: Types and Pricing Explained

Mutual Funds: Types and Pricing Explained There are several types of mutual funds, each with its own investment objective and strategy. Some common types include equity funds, bond funds, index funds, and money market funds. Equity funds invest in stocks, bond funds invest in fixed-income securities, index funds track a …

Multi-Asset Class: Definition, Fund Types, Benefits

What is Multi-Asset Class? Multi-Asset Class refers to a type of investment strategy that involves diversifying a portfolio across multiple asset classes. Asset classes can include equities, bonds, commodities, real estate, and cash. The goal of multi-asset class investing is to reduce risk and increase potential returns by spreading investments …

Market Timing: The Risks of Trying to Predict the Market

Market Timing: The Risks of Trying to Predict the Market Market timing refers to the practice of trying to predict the future movements of the stock market in order to make investment decisions. It involves attempting to buy stocks or other securities when prices are low and sell them when …

Long/Short Fund: Definition, Overview, Examples

What is a Long/Short Fund? Definition and Explanation Long/short investing is a strategy where the fund manager aims to generate returns by simultaneously buying securities that are expected to increase in value (long positions) and selling securities that are expected to decrease in value (short positions). This allows the fund …

Lipper Indexes: Their Functionality And Mechanics

Importance of Lipper Indexes in Mutual Funds 1. Performance Comparison Lipper Indexes allow investors to compare the performance of different mutual funds. By analyzing the returns and risk metrics provided by these indexes, investors can assess the relative performance of various funds within the same category. This comparison helps investors …

Life Income Fund LIF Definition and How Withdrawals Work

What is a Life Income Fund (LIF)? A Life Income Fund (LIF) is a type of retirement savings vehicle that provides individuals with a steady income stream during their retirement years. It is designed to hold and manage the funds accumulated in a Registered Retirement Savings Plan (RRSP) or a …

Income Fund Definition Types and Examples

Income Fund Definition An income fund is a type of mutual fund that focuses on generating regular income for investors. Unlike growth funds, which aim to increase the value of the investment over time, income funds prioritize providing a steady stream of income through dividends, interest payments, and other sources. …

Growth and Income Fund – Definition, Investment Mix, Examples

Growth and Income Fund Definition and Purpose The Growth and Income Fund is a diversified portfolio of stocks and bonds that seeks to achieve a balance between growth and income. The fund typically invests in a mix of large-cap stocks, which have the potential for capital appreciation, and high-quality bonds, …

Global Fund: Its Significance And Investment Strategies

What is Global Fund? Global Fund is a type of mutual fund that invests in companies from all around the world. It provides investors with the opportunity to diversify their portfolios by investing in a wide range of international companies. Unlike other mutual funds that focus on specific regions or …

Distribution in Finance: Types and Examples

Distribution in Finance: Types and Examples Distribution in finance refers to the process of getting financial products or services to customers. It involves the movement of money, securities, or other financial instruments from the provider to the end user. There are various types of distribution in finance, and each type …

Commingled Fund: Definition, Purpose, Working Mechanism, and Example

Commingled Fund: Definition, Purpose, Working Mechanism, and Example A commingled fund is a type of investment fund that pools together funds from multiple investors to create a diversified portfolio. It is typically managed by a professional investment manager or a team of managers who make investment decisions on behalf of …

Business Development Company BDC Definition and How to Invest

What is a Business Development Company (BDC)? A Business Development Company (BDC) is a type of investment company that provides financing and capital to small and mid-sized businesses. BDCs are regulated by the Securities and Exchange Commission (SEC) and are required to invest in private and public companies that meet …

Balanced Fund Investment: Definition, Mix, Examples

Balanced Fund Investment: Definition A balanced fund investment is a type of mutual fund that aims to provide investors with a balanced portfolio of both stocks and bonds. It is designed to offer a mix of growth and income by investing in a diversified range of assets. The fund manager …

Asset Management Company (AMC) Definition and Example

What is an Asset Management Company? An Asset Management Company (AMC) is a financial institution that manages and invests funds on behalf of its clients. It acts as a professional manager for various types of investment portfolios, including mutual funds, pension funds, and other institutional accounts. The primary goal of …

Annual Turnover Definition Calculation Example

What is Annual Turnover? Annual turnover refers to the measure of how frequently the holdings of a mutual fund are bought and sold within a given year. It is an important metric that investors use to assess the level of trading activity within a fund. The annual turnover rate is …

Abnormal Return: Definition Causes Example

What is Abnormal Return? Abnormal return can be positive or negative, indicating that the investment has outperformed or underperformed the market, respectively. It is calculated by subtracting the expected return from the actual return. There are several factors that can contribute to abnormal returns, including company-specific news, market events, economic …

12B-1 Plan: Its Meaning, Function, And Disclosure

Meaning of 12B-1 Plan The 12B-1 plan is a type of fee structure that is commonly associated with mutual funds. It gets its name from the section of the Investment Company Act of 1940 that governs these types of fees. The purpose of the 12B-1 plan is to allow mutual …