Balanced fund

An investment company that invests in stocks and bonds. The same as a balanced mutual fund.

Similar financial terms

Balanced mutual fund
This is a fund that buys common stock, preferred stock and bonds. The same as a balanced fund.

Federal funds rate
The rate charged by the Federal Reserve to member banks when excess reserve loans are made from one bank to another.

Fundamental analysis
A method of research that studies basic financial information to forecast profits, supply and demand, industry strength, management ability, and other intrinsic matters affecting a stock's market value and growth potential.

Annual fund operating expenses
For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.

Unfunded debt
Debt maturing within one year (short-term debt).

Underfunded pension plan
A pension plan that has a negative surplus (i.e., liabilities larger than assets).

Two-fund separation theorem
The theoretical result that all investors will hold a combination of the risk-free asset and the market portfolio.

Term Fed Funds
Federal funds sold for a period of time longer than overnight.

Surplus funds
Cash flow available after payment of taxes in the project.

Stopping curve refunding rate
A refunding rate that falls on the stopping curve.

Sinking fund requirement
A condition included in some corporate bond indentures that requires the issuer to retire a specified portion of debt each year. Any principal due at maturity is called the balloon maturity.

Single country fund
A mutual fund that invests in individual countries outside the United States.

Revenue fund
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.

Regional fund
A mutual fund that invests in a specific geographical area overseas, such as Asia or Europe.

The redemption of a bond with proceeds received from issuing lower-cost debt obligations ranking equal to or superior to the debt to be redeemed.

Refunded bond
Also called a prerefunded bond, one that originally may have been issued as a general obligation or revenue bond but that is now secured by an "escrow fund" consisting entirely of direct U.S. government obligations that are sufficient for paying the bondholders.

Eligible for refunding under the terms of indenture.

Pure index fund
A portfolio that is managed so as to perfectly replicate the performance of the market portfolio.

Purchase fund
Resembles a sinking fund except that money is used only to purchase bonds if they are selling below their par value.

Private Export Funding Corporation (PEFCO)
Company that mobilizes private capital for financing the export of big-ticket items by US firms by purchasing at fixed interest rates the medium- to long-term debt obligations of importers of US products.

Overfunded pension plan
A pension plan that has a positive surplus (i.e., assets exceed liabilities).

Open-end fund
Also called a mutual fund, an investment company that stands ready to sell new shares to the public and to redeem its outstanding shares on demand at a price equal to an appropriate share of the value of its portfolio, which is computed daily at the close of the market.

Objective (mutual funds)
The fund's investment strategy category as stated in the prospectus. There are more than 20 standardized categories.

Not permitted, under the terms of indenture, to be refundable.

No-load fund
A mutual fund that does not impose a sales commission.

No load mutual fund
An open-end investment company, shares of which are sold without a sales charge. There can be other distribution charges, however, such as Article 12B-1 fees. A true "no load" fund will have neither a sales charge nor a distribution fee.

Net advantage of refunding
The net present value of the savings from a refunding.

Mutual fund theorem
A result associated with the CAPM, asserting that investors will choose to invest their entire risky portfolio in a market-index or mutual fund.

Mutual fund
Mutual funds are pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales ch ...

Money market fund
A mutual fund that invests only in short term securities, such as bankers' acceptances, commercial paper, repurchase agreements and government bills. The net asset value per share is maintained at $1. 00. Such funds are not federally insured, although the portfolio may consist of guaranteed securities and/or the fund may have private insurance protection.

Match fund
A bank is said to match fund a loan or other asset when it does so by buying (taking) a deposit of the same maturity. The term is commonly used in the Euromarket.

Low-coupon bond refunding
Refunding of a low coupon bond with a new, higher coupon bond.

Load fund
A mutual fund with shares sold at a price including a large sales charge -- typically 4% to 8% of the net amount indicated. Some "no-load" funds have distribution fees permitted by article 12b-1 of the Investment Company Act; these are typically 0. 25%. A "true no-load" fund has neither a sales charge nor Freddie Mac program, the aggregation that the fund purchaser receives some investment advice or other service worthy of the charge.

Liability funding strategies
Investment strategies that select assets so that cash flows will equal or exceed the client's obligations.

Back-end loan fund
A mutual fund that charges investors a fee to sell (redeem) shares, often ranging from 4% to 6%. Some back-end load funds impose a full commission if the shares are redeemed within a designated time, such as one year. The commission decreases the longer the investor holds the shares. The formal name for the back-end load is the contingent deferred sales charge (CDSC).

Closed-end fund
An investment company that sells shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value.

Cost of funds
Interest rate associated with borrowing money.

Sinking fund
A sinker is a fund created by a provision in many bond contracts that requires the issuer to set aside each year a portion of the final maturity payment so that investors can be certain that the funds will be available at maturity.

Private Equity Fund
A fund that buys majority stakes in companies and/or entire business units to restructure its capital, management and organization. Usually the targets are delisted (unless already unlisted), held private and restructured over a period of 3-7 years, and then again listed through an IPO.

Restructuring may be done through leveraged buyouts, venture capital, growth capital, angel investing, mezzanine debt, management share participation programmes and others.

Big players in th ...

Mutual Fund Switching Privileges
Allow an investor to switch out of and into a different fund(s) within the same family of funds at very low or no compensation.

Segregated Funds
These funds guarantee that, regardless how the fund performs, at least a minimum percentage (usually 75 per cent or more) of the investor's payments into the fund will be returned when the fund matures.

Sinking Fund
A method whereby a company purchases a given percentage of its bonds or shares as per agreement in the trust indenture or prospectus. This provides the investor with some degree of liquidity, knowing that the company must purchase shares each year.

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

Advance funded pension plan
Pension plan in which funds are set aside in advance of the date of retirement.

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Marketed Deal

An arrangement in a public share distribution whereby the price at which the shares are sold is determined after a period of marketing activities. During the marketing period, the underwriters are able to contact potential purchasers to assess potential demand and price sensitivity. Shares continue to be publicly traded, if they had been previously listed. The underwriters minimize the price risk ...

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