Accumulation plan - An arrangement that enables an investor to purchase a set dollar amount of mutual fund units on a regular schedule.

Adjusted cost base - An income tax term that refers to the price you paid for your investment plus any adjustments, such as distributions.

Alt / Alternative fund - Mutual funds that invest in: (1) non-traditional assets such as real estate, commodities and leveraged loans; (2) alternative strategies such as long/short, event-driven or market-neutral; or (3) illiquid assets such as private credit or private equity.

Annuity - A sum of money that you give to a company to invest. The company provides you with regular payments going forward, for either a specific amount of time or for life.

Assets - What a firm or individual owns. or controls with the expectation it will provide a future benefit.

Back-end load - A sales charge levied when mutual fund units are redeemed.

Balanced fund - A mutual fund that has an investment policy of balancing its portfolio by including bonds and shares in varying proportions based on the fund’s investment policies.

Bear market - A period when the value of the securities market, or a sector of the securities market, is in general decline, with prices falling 20% or more from recent highs.

Benchmark - Information that helps you compare the performance of different investment products. Benchmarks cannot be compared directly to your personal or target rates of return because they do not take costs into account.

Beneficiary - A person who receives or gains an advantage, profit or item as part of a trust, will, or life insurance policy.

Beta - A statistical term used to illustrate the relationship of the price of an individual security or mutual fund unit to similar securities or financial market indexes, to help determine the volatility of the security.

Blue chip - A term to describe high-grade equity securities.

Bond - A long-term debt instrument with the promise to pay a specified amount of interest and to return the principal amount on a specified maturity date.

Bond fund - An investment fund that holds mostly bonds.

Book Cost - Book cost – the total amount paid to purchase a security, including any transaction charges related to the purchase, adjusted for reinvested distributions, returns of capital and corporate reorganizations.

Broker - Broker - An individual or firm that charges a fee for executing investors’ orders to buy and sell securities, commodities or other property.

Budget apps - Online tools to help people manage their income and expenses in order to save for the future. Budget apps can typically be accessed through your computer or smartphone and a quick online search can help you find an app that best suits your needs.

Bull market - An extended period when the value of the securities market, or a sector of the securities market, is generally rising.

Buying on margin - Purchasing a security partly with borrowed money.

Callable securities - Preferred shares or bonds that allow the issuing corporation to repurchase securities by a specified date. These are also known as redeemable shares.

Capital - Generally, the money or property used in a business. The term is also used to apply to cash in reserve, savings or other property of value.

Capital gains - An increase in the value of a capital asset (such as an investment) so that it is worth more than the purchase price. The gain is realized when the asset is sold.

Capital market - The financial market for buying and selling securities, such as stocks and bonds.

Closed-end fund - A fund company that issues a fixed number of shares. Its shares are bought and sold on stock exchanges but are not redeemable by the fund company.

Closing market value - The market value of your investment at the end of the period referred to on your statement.

Common stock - A security representing ownership of a corporation’s assets. Voting rights are normally accorded to holders of common stock.

Compound interest - Money that you earn on the initial principal of an investment and on all the accumulated interest from a previous period. For example, if you invest $100 at an annual interest rate of 4%, it will grow by $4 to $104 after one year. In the next year, at 4%, it will grow to $108.16. The extra 16 cents is interest earned on the previous interest. The compounding increases each year and produces a sum of money that grows faster than with simple interest which is only calculated on the principal amount.

Compounding - The process by which income is earned on income that has previously been earned and reinvested. The end value of the investment includes both the original amount invested and the reinvested income.

Concentration risk - The risk of loss because your money is concentrated in one investment or type of investment sector.

Consumer Price Index (CPI) - A statistical device that measures the change in the cost of living for consumers by examining the weighted average of a basket of consumer goods and services. It is used to illustrate the percentage that prices rise or fall or the amount of inflation that has taken place.

Contribution room - The maximum amount that you can contribute to your RRSP or TFSA in a given year.

Contributions - The amount of money you have invested in an investment fund. Also referred to as purchases.

Coupon rate - The yield paid by a fixed-income security such as a bond.

Credit reporting agencies - Organizations that keep historical credit information on individuals and businesses and produce their credit score. If your credit score is poor, it will be more difficult for you to borrow money in the future. There are two major credit reporting agencies in Canada: Equifax Canada and TransUnion Canada. To obtain a copy of your credit file for free, contact the agencies’ websites.

Current yield - An investment’s annual income (interest or dividends) divided by the current price of the security.

Custodian - A financial institution, usually a bank or trust company, that holds a mutual fund’s securities and cash in safekeeping.

Dealer firm - A company where financial advisors are registered. Dealer firms provide services to investors through an advisor. Services include understanding clients’ financial needs; buying and selling securities, including units of investment funds, for clients based on their needs; and providing account statements and other information.

Decumulation - The process through which retirees manage the withdrawal of their investments and income during their retirement years.

Deferral of taxation - A form of tax sheltering that results from an investment that offers deductions during the investor’s high-income years and/or postpones capital gains or other income until after retirement or to another period when the income level is expected to be reduced. A Registered Retirement Savings Plan (RRSP) is an example of this.

Deferred sales charge (DSC) - The deferred sales charge option is an option for paying a commission to acquire mutual funds. The investor pays no commission at the time of purchase; the investor’s full investment is sent to the investment fund manager. The manager pays a commission to the dealer firm in respect of the purchase. If the investor sells units purchased under a deferred sales charge option within a defined period of time (often 6 or 7 years), the investor will pay a commission, which declines in amount over time, at the time of the sale. Deferred sales charges decline to zero after a specific number of years.

Defined benefit pension plan - An employer-sponsored pension plan that guarantees a specific income at retirement, based on earnings and the number of years worked.

Defined contribution pension plan - an employer-sponsored pension plan that does not promise an employee a specified benefit upon retirement. Benefits depend on the performance of investments, chosen by the employee, which are made with contributions to the plan by both the employer and the employee.

Discount broker - A brokerage firm that charges a reduced commission on transactions but does not provide investment advice.

Distributions - Payments to investors by a mutual fund from income or from profit realized from sales of securities.

Diversification - The investment in a number of different securities. This reduces the risks inherent in investing. Diversification may be among types of securities, companies, industries or geographic locations.

Dividend - A payment made by a company to its shareholders from the company’s profits. For common shares, the dividend varies with the fortunes of the company and the amount of cash on hand. It may be omitted if business is poor or the directors withhold earnings to invest in plant and equipment.

Dividend fund - A mutual fund that invests in common and preferred shares of senior corporations with a history of regular dividend payments at above average rates.

Dividend tax credit - An income tax credit available to investors who earn dividend income through investments in the shares of Canadian corporations.

Emerging market - An economy (usually of a country) that is growing rapidly and becoming more advanced, which might make it an attractive place to invest.

Equity - The net worth of a company. This represents the ownership interest of the shareholders (common and preferred) of a company. For this reason, shares are often known as equities.

Equity fund - A mutual fund whose portfolio consists primarily of common stocks.

ETF - An ETF is an investment fund that trades like a common stock on an exchange. ETFs are often structured to mirror a stock index, a commodity or currency.

ETF Facts - A document that ETF managers are required to provide for each ETF that they create. The purpose of ETF Facts is to make it easier for investors to find and use key information about individual ETFs. Each ETF Facts is in plain language, no more than two pages double-sided and highlights key information for investors, including past performance, risks and the costs of investing in the ETF. Dealers must provide ETF Facts to their clients within two days after the client invests in the fund.

Exchange-traded fund (ETF) - An ETF is an investment fund that trades like a common stock on an exchange. ETFs are often structured to mirror a stock index, a commodity or currency.

Executor - A person or company chosen by a person to fulfill the instructions in his/her will.

Face value - What you pay to buy a bond or some other investment.

Fair market value - The price a willing buyer would pay a willing seller if neither was under any compulsion to buy or sell. The standard at which property is valued for a deemed disposition.

Fiduciary - An individual or institution occupying a position of trust that acts on behalf of another person to manage their assets. An executor, administrator or trustee.

Financial advisor - A person who provides financial advice or guidance to clients based on their needs and goals. Typically they provide clients with financial products, services and advice. Also known as an investment advisor.

Financial planner - A person who helps clients meet their long-term financial objectives by analyzing the client’s status and setting a program to achieve that client’s goals.

Fixed dollar withdrawal plan - A plan that provides the mutual fund investor with fixed-dollar payments at specified intervals, usually monthly or quarterly.

Fixed income investments - Investments that generate fixed interest payments until their maturity date.

Fixed-period withdrawal plan - A plan through which the mutual fund investor’s holdings are fully depleted through regular withdrawals over a set period of time. A specific amount of capital, together with accrued income, is systematically exhausted.

Front-end load - A sales charge or commission levied at the time of purchase of mutual fund units.

Fund Facts - A document that fund managers are required to provide for each mutual fund that they create. The purpose of Fund Facts is to make it easier for investors to find and use key information about individual mutual funds. Each Fund Facts is in plain language, no more than two pages double-sided and highlights key information for investors, including past performance, risks and the costs of investing in the mutual fund. Dealers must provide Fund Facts to their clients before the client invests in the fund.

Fund manager - A company that is registered to oversee the day-today operations of investment funds, including implementing a fund’s investment strategy and managing its portfolio trading activities based on the stated investment objectives of the fund.

Fund of funds - A mutual fund that invests in other mutual funds. The investor costs are contained in the Management Expense Ratio (MER) of the fund that the investor owns directly; s/he does not pay the aggregate of all MERs in underlying funds. This is in accordance with Section 15.2 of National Instrument 81-106 Investment Fund Continuous Disclosure, which is a specific rule on the calculation of the MER for a fund that holds funds.

Growth stocks - Shares of companies whose earnings are expected to increase at rate above the average for the market.

Guaranteed investment certificates (GICs) - Deposit instruments paying a predetermined rate of interest for a specified term, available from banks, trust companies and other financial institutions.

Identity theft - A type of fraud that a person commits by using another person’s personal information (such as birthdate, social insurance number, address or credit card number) or financial information to borrow money, make transactions or get other benefits in the other person’s name. It is important to protect your personal information because If someone steals your identity and borrows money, you could be responsible for repaying the debt and it could affect your ability to borrow money in the future. You will experience significant inconvenience in time and potentially money to obtain new identification, update your records, and deal with inquiries from third parties.

Income funds - Mutual funds that invest primarily in fixed-income securities such as bonds, mortgages and preferred shares. Their primary objective is to produce income for investors while preserving capital.

Index fund - A mutual fund that matches its portfolio to that of a specific financial market index, with the objective of duplicating the general performance of the market in which it invests.

Inflation - A quantitative measure of the rate at which the average price level of a basket of goods and services in an economy increases over a period of time. In Canada, inflation is generally measured by the Consumer Price Index (CPI).

Interest - Payments made by a borrower to a lender for the use of the lender’s money. A corporation pays interest on bonds to its bondholders.

International fund - A mutual fund that invests in securities of companies anywhere outside the investors’ country of residence.

Investment advisor - A person who provides financial advice or guidance to clients based on their needs and goals. Typically they provide clients with financial products, services and advice. Also known as a financial advisor.

Investment dealer - A company where financial advisors are registered. Dealer firms provide services to investors directly or through advisors. Services include understanding clients’ financial needs, buying and selling units of investment funds for clients based on their needs, providing account statements and other information, ensuring advisors comply with government rules.

Investment fund - A pool of money belonging to many investors that is used to collectively purchase stocks, bonds or other securities. The most common type of investment fund is a mutual fund.

Investment fund manager - A company that is registered to oversee the day-today operations of investment funds, including implementing a fund’s investment strategy and managing its portfolio trading activities based on the stated investment objectives of the fund.

Leverage - The use of borrowed money, specifically various financial instruments or borrowed capital, such as margin, to increase the potential return of the amount invested.

Liabilities - All debts or amounts owing by a person or company in the form of accounts payable, loans, mortgages and long-term debts.

Life annuity - An annuity under which payments are guaranteed for the life of the annuitant.

Liquid alternative funds - Mutual funds which are alternative investments offered to retail investors, which are permitted to invest in alternative investments.

Liquidity - The ease with which an investment may be converted to cash at a reasonable price.

Load - Sales charge or commission that the investor pays when buying or selling units of a mutual fund. The commission may be a one-time charge at the time the investor buys into the mutual fund (front-end load), or charged when the investor sells the investment (back-end load).

Management Expense Ratio (MER) - is the ratio, expressed as a percentage, of the expenses of an investment fund to its average net asset value. It reflects the percent of your investment that you pay for (1) the services you receive for participating in an investment fund and (2) taxes.

Management fee - The sum paid to the fund manager by the investment fund for supervising its portfolio and administering its operations.

Margin - Money that is borrowed from a brokerage firm for the purpose of purchasing securities. It is the difference between the total value of the securities. in an investor’s account and the amount of loan from the brokerage firm.

Marginal tax rate - The rate of tax on each additional dollar of income. It increases as income increases.

Market index - A hypothetical portfolio of investment holdings which represents a segment of the financial market. In Canada the benchmark composite index is the Canada S&P/TSX Composite Index.

Market price - In the case of a security, market price is usually considered the last reported price at which the stock or bond is sold.

Market Value - The price at which an investment can be sold at a specific point in time. The market value of your investment funds changes daily. Therefore, the market value of your funds will always be linked to a specific date, such as the beginning of a statement period or the date of purchase.

Maturity - The date at which a loan or bond or debenture comes due and must be redeemed or paid off.

Money market - A sector of the capital market where short-term obligations, such as Treasury bills, commercial paper and bankers’ acceptances, are bought and sold.

Money market fund - A type of mutual fund that invests primarily in treasury bills and other low-risk, short-term investments.

Money purchase pension plan - See defined contribution pension plan.

Mortgage fund - A mutual fund that invests in mortgages. Portfolios of mortgage funds usually consist of first mortgages on Canadian residential property, although some funds also invest in commercial mortgages.

Mortgage-backed securities - A type of asset-backed security that is secured by a mortgage or collection of mortgages. The holders of these securities receive regular payments of principal and interest.

Mutual fund - The most common type of investment fund. The investments held in a mutual fund are based upon the objectives of the mutual fund as described in the fund facts document, prospectus or other offering document. Mutual funds do not trade on an exchange.

Net asset value - The value of all the holdings of a mutual fund less the fund’s liabilities.

Net asset value per share - Net asset value of a mutual fund divided by the number of shares or units outstanding. This represents the base value of a share of unit of a fund and is commonly abbreviated to NAVPS.

Net worth - The difference between assets and liabilities. Positive net worth means that assets exceed liabilities, while negative net worth describes the opposite scenario.

No-load fund - A mutual fund that does not charge a fee for buying or selling its units.

Open-end fund - An open-end mutual fund continuously issues and redeems units, so the number of units outstanding varies from day to day. Most mutual funds are open-ended.

Opening Market Value - The market value of a security at the beginning of a period of time.

Option - The right or obligation to buy or sell a specific quantity of a security at a specific price within a stipulated period of time.

Original cost - the total amount paid to purchase a security, including any transaction charges related to the purchase.

Over-the-counter market - A securities market that exists for securities not listed on stock exchanges. Bonds, money market securities and many stocks are traded on the over-the-counter market.

Par value - The principal amount, or value at maturity, of a debt obligation. It is also known as the denomination or face value.

Pension adjustment - An amount that reduces the allowable contribution limit to an RRSP based on the pension contributions to the employee’s pension plan or deferred profit sharing plan. An individual’s pension adjustment can be found on a T4 statement and on a Revenue Canada Notice of Assessment.

Pension plan - A retirement plan that requires an employer to make contributions into a pool of funds set aside for a worker’s future benefit. Some pension plans also allow workers to make voluntary contributions.

Portfolio - All the securities which an investment company or an individual investor owns.

Power of attorney for personal care - A person chosen by an individual to make decisions and act on his/her behalf regarding health care and medical treatment, including diet, housing, clothing, hygiene, and safety.

Power of attorney for property - A person chosen by an individual to make decisions and act on his/her behalf regarding matters related to property and finances during the individual’s lifetime if the individual does not have the capacity to make his/her own decisions. The person acting as a power of attorney can be a relative, friend or another trusted individual. The person acting as a power of attorney does not have to be a lawyer. Appointing a power of attorney must be done in writing. Rules governing powers of attorney vary by province.

Preferred share - Shares of common stock of a company with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, preferred shareholders are paid from the company assets before common shareholders.

Premium - The amount by which a bond’s selling price exceeds its face value. Also the amounts paid to keep an insurance policy in force.

Present value - The current value of a future sum of money or stream of cash flows given a specified rate of return.

Preservation of capital - Protecting your initial investment by investing in low-risk securities so as to preserve capital and prevent loss in a portfolio. Low-risk securities tend not to rise or fall as much as high-risk securities, so gains and losses tend to be lower. This approach is usually a priority for people investing for a short time. It is also appropriate for retirees and those approaching retirement who may be relying on their investments to generate a stable income in the short-term and have limited time to recover any losses if the markets experience a downturn.

Price earnings ratio - The ratio of a company’s share price to the company’s earnings per share.

Principal - (1) The person for whom a broker executes an order, or a dealer buying or selling for his or her own account. (2) The original sum of money borrowed for a loan or invested in an investment.

Prospectus - A legal document that sets out the full, true and plain facts you need to know about a security. It also contains information about the mutual fund selling the security. Investors who do not want to read the full prospectus for a mutual fund can find key information in the fund’s Fund Facts document.

Purchases (also known as contributions) - The amount of money you have invested in an investment fund.

Ratio withdrawal plan - A type of mutual fund withdrawal plan that provides investors with income based on a percentage of the value of units held.

Real estate fund - A mutual fund that invests primarily in residential or commercial real estate.

Real estate investment trust - A closed-end investment company that specializes in real estate or mortgage investments.

Realized gains or losses - When an investor sells an investment (such as a mutual fund), the investor realizes any gain or loss in the investment’s value. Before the investment is sold, its value could change many times, but you do not benefit from the gain (or lose from the decline) until you actually sell it.

Redeemable shares - Preferred shares or bonds that give the issuing corporation an option (or obligation) to repurchase securities at a stated price. These are also known as callable securities because the issuing corporation can call them in.

Redemptions - Amounts that you have withdrawn from an investment fund.

Registered education savings plan (RESP) - A plan sponsored by the Canadian government that enables a contributor, on a tax deferred basis, to accumulate assets on behalf of a beneficiary to pay for a postsecondary education.

Registered retirement income fund (RRIF) - A retirement fund into which RRSP assets are to be rolled by the end of the year in which the RRSP holder turns 71. RRIF holders are required to withdraw a certain percentage annually, depending upon their age, which is taxed as income.

Registered retirement savings plan (RRSP) - A retirement savings plan and investment vehicle for employees and the self-employed. Pre-tax money may be contributed annually, to a prescribed maximum, which grows tax-free until withdrawal. The last day you can make a contribution to your RRSP is December 31 of the year you turn 71 years of age.

Retained earnings - The portion of net earnings not paid out as dividends but retained by the company to be reinvested in the business or to pay debt.

Rights - Entitlements granted to shareholders to purchase additional shares directly from the company concerned. Rights are issued to shareholders in proportion to the securities they may hold in a company.

Risk - The chance an outcome or investment’s actual return will differ from the expected outcome or return.

Risk tolerance - The degree of variability in investment returns that an investor is willing to withstand.

Sales charge - Commission that the investor pays when buying or selling units of a mutual fund. The amount is paid to the dealer firm, and is a percentage of the investment value. Sales charges are also known as loads. The commission may be a one-time charge at the time the investor buys into the mutual fund (front-end load), or charged when the investor sells the investment (back-end load).

Securities Act - Provincial legislation regulating the underwriting, distribution and sale of securities.

Securities Commission - Government organization or Crown corporation in each province and territory in Canada that regulates the capital markets in its jurisdiction. The mandate is to protect investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets. Securities commissions regulate distribution and sale of mutual funds and other securities in their own jurisdiction.

Securities Commissions

Series A Mutual Fund - a series of a mutual fund which bundles a fee for advice within the mutual fund.

Series D Mutual Fund - a series of a mutual fund which contains a fee paid to a discount broker for services provided but does not contain an advice fee.

Series F Mutual Fund - a series of a mutual fund which does not bundle a fee for advice within the mutual fund; advice fees are paid directly by the investor to his/her adviser.

Shareholders’ equity - The amount of a corporation’s assets belonging to its shareholders (both common and preferred) after all debts of the corporation have been paid.

Shares - Units of ownership in a corporation that provide for an equal distribution in any profits, if any are declared, in the form of dividends. Holding shares means having part ownership of a company. The terms share and stock are often used interchangeably.

Short selling - The sale of a security made by an investor who does not own the security. The short sale is made in expectation of a decline in the price of a security, which would allow the investor to then purchase the shares at a lower price. Short sellers make money if the stock price declines, and lose money if the stock price increases.

Simplified prospectus - An abbreviated and simplified prospectus distributed by mutual funds to purchasers and potential purchasers of units or shares (see “Prospectus”). Investors who do not want to read the full prospectus for a mutual fund can find key information in the fund’s Fund Facts document.

Specialty fund - A mutual fund that concentrates its investments on a specific industrial or economic sector or a defined geographical area.

Spread - The difference between the interest rate a financial institution pays to people who deposit money and the interest rate the financial institution charges people who borrow money.

Stock options - The right (but not the obligation) to purchase a corporation’s stock at a specified price within a specific time period. If the stock price increases, the person holding the option could exercise his/her right to purchase the stock and make a profit. If the stock price does not increase, the person does not have to exercise his/her right to purchase the stock.

Stocks - Units of ownership on a corporation that provide for an equal distribution in any profits, if any are declared, in the form of dividends. Holding stocks means having part ownership of a company. The terms share and stock are often used interchangeably.

Strip bonds - A bond where both the principal and regular coupon payments, which have been stripped from the bond, are sold separately.

Systematic withdrawal plan - Plans offered by mutual fund companies that allow unitholders to receive payment from their investment at regular intervals.

Tax credit - An amount of money that taxpayers can subtract from taxes owed, thereby reducing the amount of income tax owed.

Tax deduction - A reduction of total income before the amount of income tax payable is calculated.

Tax-Free Savings Account (TFSA) - A registered plan that allows you to earn tax-free investment income and capital gains on money contributed up to a set annual limit.

Time horizon - The length of time over which an investment is made and held before it is liquidated or the investor intends to liquidate it.

Trade - Buying or selling a security.

Trading expense ratio (TER) - The TER is a measure of the cost of trading the securities in a fund annually. This cost is not included in the fund’s management expense ratio (MER). The TER is expressed as a percentage of fund’s average total assets (e.g., 0.2%). You can find the TER of a fund in the Fund Facts document for the fund.

Trailing commission - A fee paid on an ongoing basis by the fund manager to the dealer for services and advice provided to the client for as long as the client invests in the fund. Part of the trailing commission may be paid to the client’s advisor by the dealer to monitor the client’s account and provide the client with on-going advices. The trailing commission is not paid directly by the client but is paid by the fund to the dealer out of the management expense ratio.

Treasury bill (T-bill) - Short-term government debt with a maturity of one year or less.

Trust - A fiduciary relationship in which one party gives another person, called a trustee, the right to hold title to property or assets to be held by the trustee for the use and benefit of a third party, the beneficiary.

Underwriter - An investment firm that (1) purchases securities directly from an issuer for resale to other investment firms or the public or (2) sells securities for an issuer to the public.

Unit trust - An unincorporated fund whose organizational structure permits the profits to be paid directly to the individual unit owners instead of reinvesting them in the fund. This is a common structure in the UK.

Unrealized gains or losses - Unrealized gains or losses occur when a stock’s value changes after an investor has bought it, but before s/he sells it. If the stock value rises, the investor has an unrealized gain. If the stock value decreases, the investor has an unrealized loss. When the investor sells, the stock, s/he “realizes” the gain or loss.

Variable life annuity - An annuity providing a fluctuating level of payments, depending on the performance of its underlying investments.

Vesting - In pension terms, the right of an employee to all or part of the employer’s contributions on the employee’s behalf, whether in the form of cash or as a deferred pension.

Volatility - The degree and speed of changes in an investment’s value over a given period of time. Investments that change in value gradually, or minimally, are said to have lower volatility than those that change rapidly or significantly and frequently during the same time period. Volatility is usually measured historically – how an investment has acted in the past – and that behaviour suggests how the investment may behave in the future, although no one can predict the future.

Voluntary accumulation plan - A plan offered by mutual fund companies whereby an investor agrees to invest a predetermined amount on a regular basis.

Warrant - A security allowing the holder the right but not the obligation to buy shares in a company at a stated price within a specified period. Warrants are usually issued in conjunction with a new issue of bonds, preferred shares or common shares.

Wrap account - An account that holds a basket of investments designed to serve a client’s goals and that is professionally managed.

Yield - Annual rate of return received on investments, usually expressed as a percentage of the market price of the security.

Yield curve - A graphic representation of the relationship among yields of similar bonds having equal credit quality but differing maturity dates.

Yield to maturity - The annual rate of return an investor would receive if a bond were held until maturity.

Zero coupon bond - A bond that has had its coupons removed and pays no interest and is initially sold at a discount to the principal value.