Purchase fund

Similar financial terms

Hire Purchase
The right to buy an asset by the user of the asset according to a pre-agreed method. The user may be the owner for tax purposes.

Targeted repurchase
The firm buys back its own stock from a potential bidder, usually at a substantial premium, to forestall a takeover attempt.

Stock repurchase
A firm's repurchase of outstanding shares of its common stock.

Share repurchase
Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.

Repurchase of stock
Device to pay cash to firm's shareholders that provides more preferable tax treatment for shareholders than dividends. Treasury stock is the name given to previously issued stock that has been repurchased by the firm. A repurchase is achieved through either a dutch auction, open market, or tender offer.

Repurchase agreement
An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser (customer) perspective, the deal is reported as a reverse Repo.

Purchase method
Accounting for an acquisition using market value for the consolidation of the two entities' net assets on the balance sheet. Generally, depreciation/amortization will increase for this method compared with pooling and will result in lower net income.

Purchase and sale
A method of securities distribution in which the securities firm purchases the securities from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.

Purchase agreement
As used in connection with project financing, an agreement to purchase a specific amount of project output per period.

Purchase accounting
Method of accounting for a merger in which the acquirer is treated as having purchased the assets and assumed liabilities of the acquiree, which are all written up or down to their respective fair market values, the difference between the purchase price and the net assets acquired being attributed to goodwill.

Purchase
To buy, to be long, to have an ownership position.

Opening purchase
A transaction in which the purchaser's intention is to create or increase a long position in a given series of options.

Open-market purchase operation
A systematic program of repurchasing shares of stock in market transactions at current market prices, in competition with other prospective investors.

Money purchase plan
A defined benefit contribution plan in which the participant contributes some part and the firm contributes at the same or a different rate. Also called and individual account plan.

Minimum purchases
For mutual funds, the amount required to open a new account (Minimum Initial Purchase) or to deposit into an existing account (Minimum Additional Purchase). These minimums may be lowered for buyers participating in an automatic purchase plan

Open market purchase
An order placed by an insider, after all appropriate documentation has been filed, to buy restricted securities openly on an exchange.

Bargain-purchase-price option
Gives the lessee the option to purchase the asset at a price below fair market value when the lease expires.

Closing purchase
A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in a given series of options.

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.

Refunding
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.

Refundable
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.

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.

Nonrefundable
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).

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

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

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.