# 30-Day Yield A standard yield calculation developed by the Securities and Exchange Commission for bond funds. The yield is calculated by dividing the net investment income per share earned during the 30-day period by the maximum offering price per share on the last day of the period. The yield figure reflects the dividends and interest earned during the 30-day period, after the deduction of the fund's expenses. It is sometimes referred to as "SEC 30-Day Yield" or "standardized yield". 30-Day Yield Without Subsidy The 30-day yield without applicable waivers or reimbursements, whenever the fund is subsidizing all or a portion of the fund's expenses as of the current reporting period. Absent such waivers or reimbursements, the returns would have been lower. Waivers and/or reimbursements may be discontinued any time. 7-Day Yield The annualized rate of income paid to shareholders over the past seven days. 7-Day Yield Without Subsidy The 7-day yield without applicable waivers or reimbursements, whenever the fund is subsidizing all or a portion of the fund's expenses as of the current reporting period. Absent such waivers or reimbursements, the returns would have been lower. Waivers and/or reimbursements may be discontinued any time.
A Active Management The trading of securities to take advantage of market opportunities as they occur, with the goal of outperforming an investment benchmark index. Active managers rely on research, market forecasts, and their own judgment and experience in selecting securities to buy and sell. Aggressive An investment approach that accepts above-average risks in return for potentially above-average investment returns. Aggressive Allocation Aggressive-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold larger positions in stocks than moderate-allocation portfolios. These portfolios typically have 70% to 90% of assets in equities and the remainder in fixed income and cash. Aggressive Growth Funds in this objective seek rapid growth of capital. They often invest in small or emerging growth companies and are more likely than other funds to invest in initial public offerings (IPOs) and in companies with high price/earnings and price/book ratios. Aggressive growth funds may also use such investment techniques as heavy sector concentrations, leveraging, and short-selling. Alpha Measures risk-adjusted performance. A positive Alpha indicates stronger performance than predicted by the fund's level of risk (measured by Beta). A negative Alpha represents weaker performance than predicted by a fund's Beta. Alpha and Beta are more reliable measures when used in combination with a high R2, which indicates a high correlation between the movements in a fund's returns and the movements in its benchmark. Alpha is annualized. Alternative Minimum Tax (AMT) Federal tax aimed at ensuring that wealthy individuals, trusts, estates, and corporations pay at least some income tax. For individuals, the AMT is computed by adding tax preference items such as passive losses from tax shelters, and tax-exempt interest on private-purpose bonds issued after August 7, 1986, to adjusted gross income. American Depositary Receipt (ADR) A negotiable receipt representing a specific number of equity shares in a foreign corporation. ADRs trade in American dollars in the American securities markets like domestic equities. American Depositary Shares (ADS) A trading unit for the issuer in the U.S. which may represent more or less than one underlying share of the issuer. ADSs are issued in New York in registered form, eligible for trading and clearing in the U.S. markets, and may be made eligible for clearing outside the U.S. in Euroclear and CEDEL. Annual Report A yearly report or record of an investment's (e.g., mutual fund or stock) or company's financial position and operations. Annuity A form of insurance contract that provided a steady stream of periodic payments, typically for life. An annuity can be fixed or variable. A fixed annuity pays a set rate of interest that is adjusted periodically, while a variable annuity's payments are dependent on the performance of the underlying investment chosen by the annuitant. Appreciation An increase in the value of an investment. Asset Anything with commercial or exchange value owned by a business, institution or individual. Examples include cash, real estate and investments. Asset Allocation Dividing investment dollars among several asset classes (e.g., stocks(equities), bonds, and short term investments). Asset Allocation Funds Asset allocation funds have the ability to shift assets among asset classes (for example stocks (equities), bonds, and short-term investments). Asset allocation funds take the concept of a private asset manager - a skilled professional who builds and manages a comprehensive portfolio for a client - and apply it to a mutual fund. Asset Class A group of securities or investments that have similar characteristics and behave similarly in the marketplace. The three primary asset classes are stocks (equities), bonds, and short-term investments. Asset-backed Securities Bonds or notes backed by loan paper or accounts receivable originated by banks, credit card companies, or other providers of credit and often "enhanced" by a bank letter of credit or by insurance coverage provided by an institution other than the issuer. Assets Covered Reported in Composition, this is the percentage of the portfolio's equity assets for which the corresponding portfolio characteristic is provided. Auction Market A market for securities, typically found on a national securities exchange, in which trading in a particular security is conducted at a specific location with all qualified persons at that post able to bid or offer securities against orders via outcry. Average Annual Total Return Average annual total return is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variation in performance; they are not the same as actual year-by-year results.
B Back End Load A fee imposed by some funds when shares are redeemed (sold back to the fund) during the first few years of ownership. The fee is calculated based on the value of the shares being sold. Many Back End Loads are progressive, meaning that the longer you hold the shares in the fund, the lower the fee becomes until in some cases it is eliminated altogether. A fee imposed by some funds when shares are redeemed (sold back to the fund) during the first few years of ownership. Balanced Balanced funds seek both income and capital appreciation by investing in a generally fixed combination of stocks and bonds. These funds generally hold a minimum of 25% of their assets in fixed-income securities at all times. Bank Loan Bank-loan portfolios primarily invest in floating-rate bank loans instead of bonds. In exchange for their credit risk, these loans offer high interest payments that typically float above a common short-term benchmark such as the London Interbank Offered Rate, or LIBOR. Basis Point One-hundredth of one percent, or 0.01%. For example, 20 basis points equal 0.20%. Investment expenses, interest rates and yield differences among bonds are often expressed in basis points. Bear Market These funds dedicate a majority of the fund's assets to equities. Most of the portfolio is dedicated to short stock positions in an attempt to take advantage of anticipated market or stock declines producing a net exposure to equities of less than or equal to negative 20%. Some managers invest the proceeds from their short positions in low-risk assets, while others dedicate a portion to long stock positions in order to hedge against broad market rallies. In the event of a broad market rally, these funds will lose money on their short positions but will experience a gain on their long positions. Short positions typically account for 60% to 85% of fund active exposure, although some funds may be 100% short after excluding regulatory collateral. These funds will typically have a beta of less than negative 0.3 to equity indexes such as the S&P 500 or MSCI World. Benchmark A standard against which the performance of a security, mutual fund or investment manager can be measured. Some well-known benchmarks are the Dow Jones Industrial Average and the S&P 500 Index. Beneficiary The person(s) designated to receive all or a portion of the participant's benefits in the event of the participant's death. Beta A historical measure of a fund's sensitivity to market movements calculated by comparing a fund's monthly returns, over 36 months, to those of the fund's benchmark. By definition, the Beta of the benchmark is 1.0. A Beta of less than 1.0 indicates that the fund is less sensitive to market movements, while a Beta greater than 1.0 indicates a fund that tends to be more sensitive to market movements. For example, a beta of 1.5 for a domestic stock fund indicates that over the last three years, the fund's monthly returns have fluctuated 50 percent more than the fund's benchmark, assuming that no other factors have affected the fund's returns. Generally, the higher the correlation between the fund and the market (as measured by R2), the more meaningful a Beta is. Because Beta is based on measurements of past performance, it is not an indication of what the fund's performance will be in the future. Bill (Treasury or T-Bill) A government security with a maturity of a year or less. Blue Chip Stocks Stocks of well-established companies that have had a history of earnings and dividend payments, as well as a reputation for sound management and quality of products and services. While not all large cap stocks are blue chip stocks, there is usually a large cap bias to blue chip stocks. Bond A debt security which represents the borrowing of money by a corporation, government, or other entity. The borrowing institution repays the amount of the loan plus a percentage as interest. Bond funds generally invest in bonds. Bond Funds A fund that invests primarily in bonds and other debt instruments. Bond Rating A rating or grade that is intended to indicate the credit quality of a bond, considering the financial strength of its issuer and the likelihood that it will repay the debt. Agencies such as Standard & Poor's and Moody's Investors Service issue ratings for different bonds, ranging from AAA (highly unlikely to default) to D (in default). Broadly Diversified International Equity Funds Broadly diversified international equity funds generally fall into two categories: international funds, which do not invest in U.S. securities, and global funds, which invest anywhere in the world, including the U.S. Although they are both considered more aggressive than most domestic equity funds, broadly diversified funds are often considered to be a "less aggressive" type of international fund because of their typical emphasis on diversification within established markets. With these funds, risk is spread out across an expansive geographic area rather than concentrated in a single region or country. These funds are used by many investors to form the foundation of the international component of their portfolio. Broker A person who acts as an intermediary between the buyer and seller of a security, insurance product or mutual fund, often paid by commission. Also, a financial professional who helps investors formulate financial plans with specific objectives. Since brokerage firms may operate both as brokers and as dealers the term broker-dealer is often used. Brokerage Window A plan feature that permits participants to purchase investments that are not included among the plan's general menu of investment options.
C Capital Appreciation If the value of an investment appreciates and you sell it at a higher price than you paid, you earn a profit, also known as a capital gain. If you sell shares at a lower price than you paid for them, you'll have a capital loss. Capital Gain An increase in the value of an investment calculated by the difference between the net purchase price and the net sale price. Capital Loss Loss from the sale of an investment constitutes a capital loss. For example, if you bought a share of stock for $5 and later sold it for $2.50, you would have a realized capital loss of $2.50. Capital Market The market where securities such as stocks and bonds are traded. Capital Preservation An investment goal or objective to keep the original investment amount (the principal) from decreasing in value. Capitalization or Cap The total market value of a company's outstanding equity. Cash & Other Category A mutual fund asset allocation theory that includes net cash, short-term securities, and any other securities (such as options) not included in other asset allocation categories. Category Risk Learn More Morningstar assigns Category Risk Level to each group of mutual funds that invest in the same types of assets. These scores range from 1, for funds with the least amount of relative risk, to 10, for funds with the greatest amount. In determining the Category Risk Level, the scores based on the Morningstar Risk are reviewed by Morningstar's Research Committee. The Committee reviews the preliminary output, and makes changes where necessary, to ensure that the final scores are logically consistent and are updated to reflect current market conditions. How Morningstar Calculates Category Risk Scores: The first step is to determine the average Morningstar Risk for each category over the previous five years. Morningstar Risk is the difference between the Morningstar Return (excess total return over the risk free rate, adjusted for loads) and the Morningstar Risk Adjusted Return (excess total return over the risk free rate, adjusted for loads and risk). Risk is measured by the variations in a fund's monthly total returns during the period, with greater risk leading to a lower risk-adjusted return. The Morningstar Return and Morningstar Risk Adjusted Returns for each Category are found using equal weighted average of the total returns of all the funds in the category for a certain time period. The category's Morningstar Risk is then used as the starting point for the Category Risk Level assignments. Assignments can be modified in one of two ways. One method of modification is by logic. For instance, if one municipal bond category falls just across the dividing line from another municipal bond category, even though both invest in very similar types of assets, both categories are adjusted so that they are given the same risk assignment. They may also be adjusted by judgment. One example of this would be Long-Short Market Neutral stock funds. Although these funds tend to show very low risk scores based solely on the variations in their returns, the complexity of their strategies suggests that they should receive a higher risk score than the raw data indicates. In this case, the Category Risk score is adjusted accordingly. CEDEL An international clearing system that provides book-entry settlement and custody for certain instruments. China Region China-region stock portfolios invest almost exclusively in stocks from China, Taiwan, and Hong Kong. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in one specific region or a combination of China, Taiwan, and/or Hong Kong. Class Inception The date on which a specific share class of a fund opens to investors. Closed-End Fund A fund that does not issue and redeem shares. Closed funds are usually traded on a stock exchange. Collateral Trust Bond Corporate debt security backed by other securities, usually held by a bank or other trustee. Such bonds are backed by collateral trust certificates and are usually issued by parent corporations that are borrowing against the securities of wholly owned subsidiaries. Collateralized Mortgage Obligation (CMO) A mortgage-backed bond that separates mortgage pools into different maturity classes called tranches. This is accomplished by applying income (payments of principal and interest) from mortgages in the pool in the order the CMO's pay out. Collective or Commingled Trust Investments created especially for employee benefit plans, such as 401(k) plans, that commingle the assets of qualified retirement plans for investment purposes. They are not available to the general public and therefore are not listed in the newspaper or others sources, and are not registered with the SEC. Commission A fee imposed when investments are bought or sold to compensate the broker or other salesperson for his or her role in the transaction. Commodities Agriculture Agriculture portfolios invest in grain and feed products, oilseeds, cotton, dairy, livestock, poultry, and/or horticultural products. Investment can be made directly in physical assets or commodity-linked derivative instruments. Commodities Broad Basket Broad-basket portfolios can invest in a diversified basket of commodity goods including but not limited to grains, minerals, metals, livestock, cotton, oils, sugar, coffee, and cocoa. Investment can be made directly in physical assets or commodity-linked derivative instruments, such as commodity swap agreements. Commodities Energy Energy portfolios invest in oil (crude, heating, and gas), natural gas, coal, kerosene, diesel fuel, and propane. Investment can be made directly in physical assets or commodity-linked derivative instruments. Commodities Industrial Metals Industrial-metals portfolios invest in such industrial metals as aluminum, copper, lead, nickel, and zinc. Investment can be made directly in physical assets or commodity-linked derivative instruments. Commodities Miscellaneous Miscellaneous portfolios invest in a specific commodity that does not fit into any of Morningstar's existing commodity categories and for which not enough funds exist to merit the creation of a separate category. Commodities Precious Metals Commodities precious-metals portfolios invest in precious metals such as gold, silver, platinum, and palladium. Investment can be made directly in physical assets or commodity-linked derivative instruments. Commodity Instruments Securities that can be used to approximate the behavior of specific commodities. These include forwards, swaps, short-duration futures contracts, or derivatives. They are often used to hedge exposure to actual physical commodities. Common Stocks Stocks represent a share in the ownership of a particular company. If the company does well, the value of each share generally goes up. Although common stocks have a history of long-term growth, their prices fluctuate based on changes in a company's financial condition and on overall market and economic conditions. Communications Communications portfolios concentrate on telecommunications and media companies of various kinds. Most buy some combination of cable television, wireless-communications, and communications-equipment firms as well as traditional phone companies. A few favor entertainment firms, mainly broadcasters, film studios, publishers, and online service providers. Company Stock A plan investment option which invests primarily in employer securities and which may also maintain a cash position for liquidity purposes. Competing Fund A plan investment option that is identified by the investment manager of another option and which is subject to special rules relating to a participant's ability to buy and sell investments between the two investment options directly. Composition This quantifies the securities held by the fund. Composition can be broken down into asset type, sector, and individual security. Composition may also show the weight, or percentage of the overall portfolio, for each holding. Composition by Instrument The makeup of a fund's portfolio expressed in terms of asset allocation and industry and sector diversification. Composition by Quality Fidelity: Credit ratings for a rated issuer or security held by our investment grade taxable and municipal bond funds and multi-asset class funds with a fixed income component, are categorized using the highest credit rating among the following three Nationally Recognized Statistical Rating Organizations (NRSRO): Moody's Investors Service (Moody's); Standard & Poor's Ratings Services (S&P); or Fitch, Inc. Credit ratings for a rated issuer or security held by our non-investment grade bond funds which include multi-asset class bond funds using a composite benchmark with more than half of its target allocation in high yield or emerging market debt, and real estate, emerging market debt and convertible security funds, are categorized using Moody's. If Moody's does not publish a rating for a security or issuer, then the S&P rating is used. When S&P and Moody's provide different ratings for the same issuer or security, the Moody's rating is used. For all funds, if none of these three NRSROs publishes a rating on the issuer or security, then the security is categorized as Not Rated. All U.S. government securities are included in the U.S. Government category. The table information is based on the combined investments of the fund and its pro rata share of any investments in other Fidelity funds. Non-Fidelity: Data provided by Morningstar, who surveys fund companies for the credit rating information on the funds underlying securities holdings on a periodic basis. Morningstar instructs fund companies to only use ratings that have been assigned by a Nationally Recognized Statistical Rating Organizations (NRSRO). If three or more NRSROs have rated the same security differently, fund companies are to report the middle rating; if two NRSROs have rated a security differently, fund companies are to report the lowest rating; if only one NRSRO has rated a security, fund companies are to report that rating. Securities not rated by an NRSRO are to be included in the Not Rated category. All U.S. Government Securities are included in the AAA category. If an NRSRO provides Morningstar with a short-term issue credit rating rather than a traditional fixed income credit rating for a cash security, Morningstar will translate that short-term issue rating to an equivalent fixed income credit rating as reflected in the Credit Quality Breakdown chart. Morningstar is not itself an NRSRO nor does it issue a credit rating on the fund or any securities held by the fund. For Money Market Funds: A Tier 1 security is a money market fund eligible security whose credit rating falls in the highest short-term rating category of the Nationally Recognized Statistical Rating Organizations. An unrated security is Tier 1 if it represents comparable quality to a rated security as defined by SEC Rule 2a-7 under the Investment Company Act of 1940. A Tier 2 Security is a money market fund eligible security that is not a Tier 1 security. Compounding The cumulative effect that reinvesting earnings on an investment may have by generating additional earnings of their own, in addition to any earnings generated by the original investment. Conservative An investment approach that accepts lower rewards in return for potentially lower risks. Conservative Allocation Conservative-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold smaller positions in stocks than moderate-allocation portfolios. These portfolios typically have 20% to 50% of assets in equities and 50% to 80% of assets in fixed income and cash. Consumer Cyclical Consumer cyclical portfolios seek capital appreciation by investing in equity securities of U.S. or non-U.S. companies in the consumer cyclical sector. Consumer Defensive Consumer defensive portfolios seek capital appreciation by investing in equity securities of U.S. or non-U.S. companies that are engaged in the manufacturing, sales, or distribution of consumer staples. Contingent Beneficiary Anyone designated to receive a death benefit in the event of the death of the primary beneficiary. Also referred to as a secondary beneficiary. Contingent Deferred Sales Charge (CDSC) A fee imposed when shares of a mutual fund or a variable annuity contract are redeemed (sold) during the first few years of ownership. Also called a back-end load. Convertible Bond A corporate bond, usually a junior subordinated debenture, that can be exchanged for shares of the issuer's common stock. Convertibles Convertible-bond portfolios are designed to offer some of the capital-appreciation potential of stock portfolios while also supplying some of the safety and yield of bond portfolios. To do so, they focus on convertible bonds and convertible preferred stocks. Convertible bonds allow investors to convert the bonds into shares of stock, usually at a preset price. These securities thus act a bit like stocks and a bit like bonds. Convexity A mathematical concept that measures the sensitivity of the market price of a bond to changes in interest rates. Corporate Bond A bond issued by a corporation, rather than by a government. The credit risk for a corporate bond is based on the payment ability of the company that issued the bond. Credit risk is in addition to other risks associated with fixed-income investments such as inflation risk and interest rate risk. Correlation Measures Measures that show the validity of a comparison between a portfolio and a benchmark, based on the historical relationship between portfolio returns and index returns. Country Diversification Holdings are presented to illustrate examples of the countries or regions which the fund may invest, and may not be representative of the fund's current or future investments. Percentages are displayed for the top sectors as of the countries or regions as of the date stated. Percentages shown describe the portion of the fund's total net assets, unless otherwise stated. Coupon Rate The annual rate of interest payable on a debt security expressed as a percentage of the principal amount. Coupon Yield (see Nominal Yield). Credit Quality Fidelity: Credit ratings for a rated issuer or security held by our investment grade taxable and municipal bond funds and multi-asset class funds with a fixed income component, are categorized using the highest credit rating among the following three Nationally Recognized Statistical Rating Organizations (NRSRO): Moody's Investors Service (Moody's); Standard & Poor's Ratings Services (S&P); or Fitch, Inc. Credit ratings for a rated issuer or security held by our non-investment grade bond funds which include multi-asset class bond funds using a composite benchmark with more than half of its target allocation in high yield or emerging market debt, and real estate, emerging market debt and convertible security funds, are categorized using Moody's. If Moody's does not publish a rating for a security or issuer, then the S&P rating is used. When S&P and Moody's provide different ratings for the same issuer or security, the Moody's rating is used. For all funds, if none of these three NRSROs publishes a rating on the issuer or security, then the security is categorized as Not Rated. All U.S. government securities are included in the U.S. Government category. The table information is based on the combined investments of the fund and its pro rata share of any investments in other Fidelity funds. Non-Fidelity: Data provided by Morningstar, who surveys fund companies for the credit rating information on the funds underlying securities holdings on a periodic basis. Morningstar instructs fund companies to only use ratings that have been assigned by a Nationally Recognized Statistical Rating Organizations (NRSRO). If three or more NRSROs have rated the same security differently, fund companies are to report the middle rating; if two NRSROs have rated a security differently, fund companies are to report the lowest rating; if only one NRSRO has rated a security, fund companies are to report that rating. Securities not rated by an NRSRO are to be included in the Not Rated category. All U.S. Government Securities are included in the AAA category. If an NRSRO provides Morningstar with a short-term issue credit rating rather than a traditional fixed income credit rating for a cash security, Morningstar will translate that short-term issue rating to an equivalent fixed income credit rating as reflected in the Credit Quality Breakdown chart. Morningstar is not itself an NRSRO nor does it issue a credit rating on the fund or any securities held by the fund. For Money Market Funds: A Tier 1 security is a money market fund eligible security whose credit rating falls in the highest short-term rating category of the Nationally Recognized Statistical Rating Organizations. An unrated security is Tier 1 if it represents comparable quality to a rated security as defined by SEC Rule 2a-7 under the Investment Company Act of 1940. A Tier 2 Security is a money market fund eligible security that is not a Tier 1 security. Credit Rating An assessment of the credit worthiness of individuals and corporations based upon the history of borrowing and repayment, as well as the availability of assets and the extent of liabilities. Credit Risk The risk that a bond issuer will default, meaning not repay principal or interest to the investor as promised. Credit risk is also known as "default risk". Cumulative Total Returns Cumulative total return reflects actual performance over a stated period of time. Currency Currency portfolios invest in multiple currencies through the use of short-term money market instruments; derivative instruments including and not limited to forward currency contracts, index swaps, and options; and cash deposits. These funds include both systematic currency traders and discretionary traders. Currency Diversification The different currencies, expressed as a percentage, in which the fund's assets are issued. Currency Fluctuations Changes in the value of a currency in relationship to other major currencies. Currency fluctuations can have a significant effect on the value of international mutual funds. Currency Risk The risk that shifts in foreign exchange rates may undermine the dollar value of overseas investments. Current Income Monies paid during the period an investment is held. Examples include bond interest and stock dividends. Current Yield The ratio of a bond's interest rate or coupon to its current market price, shown as a percentage. Current Yield=Coupon Rate / Current Market Value. CUSIP An identification number assigned to mutual funds, stocks and registered bonds by the Committee on Uniform Security Identification Procedures. Custodian A person or entity (e.g., bank, trust company, or other organization) responsible for holding financial assets. Cyclicals Stocks issued by companies whose business prospects are tied to economic cycles. For example, steel companies often do poorly in a recession, when consumers are buying fewer large items, such as cars and refrigerators.
D Dealer An individual or entity that buys and sells securities for its own account. Since most brokerage firms operate both as brokers and as dealers, the term broker-dealer is commonly used. Deflation The opposite of inflation - a decline in the prices of goods and services. Denomination The face amount or par value of a security which the issuer promises to pay on the maturity date. Depreciation A decrease in the value of an investment. Deregulation The act of reducing government regulation in order to allow more free markets to create a more efficient marketplace. Some government oversight usually remains after deregulation. Designated Investment Alternative The investment options selected and monitored by your plan into which participants can direct the investment of their plan accounts. Sometimes referred to as "permissible investment options" or "investment options". Details These are high-level facts about a fund that an investor can use to help evaluate an investment option, including total net assets of a fund, expense ratio, and the current net asset value of the fund. Developing Markets Also known as emerging markets, developing markets are generally defined as those countries having a low-to-middle per capita income and in the process of developing existing or newly created market-based economies. Directed Trustee A person or entity (e.g., bank, trust company, or other organization) that is responsible for the safekeeping of trust assets, but generally has no decision making authority over the assets. Discount The difference between a bond's current market price and its face or redemption value. Distribution and/or service fee(12b-1) Fees The 12b-1 fee represents the maximum annual charge deducted from fund assets to pay for distribution and marketing costs. Total 12b-1 fees, excluding loads, are capped at 1.00% of average net assets annually. Of this, the distribution and marketing portion of the fee may account for up to 0.75%. The other portion of the overall 12b-1 fee, the service fee, may account for up to 0.25%. Distributions The percentage of a fund's capital gains paid out to shareholders as distributions. Diversification Diversification is the concept of spreading your money across different types of investments and/or issuers to potentially moderate your investment risk. Diversified Emerging Markets Diversified emerging-markets portfolios tend to divide their assets among 20 or more nations, although they tend to focus on the emerging markets of Asia and Latin America rather than on those of the Middle East, Africa, or Europe. These portfolios invest at least 70% of total assets in equities and invest at least 50% of stock assets in emerging markets. Diversified Pacific/Asia Diversified Pacific/Asia stock portfolios have a wider investment range than other Asia-oriented portfolios. These portfolios can invest throughout the Pacific Rim, including Australia and New Zealand. As a result, country weightings for these portfolios vary tremendously, though most retain some exposure to Japan and Hong Kong. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in Pacific countries, including at least 10% in Japan. Dividends Mutual fund dividends are paid out of income from the fund's investments. The tax on such dividends depends on whether the distributions resulted from interest income, or dividends received by the fund. Dollar-Cost-Averaging With dollar-cost-averaging, you invest a fixed amount on a regular basis - regardless of the current market trends. The investor buys more shares when the price is low and fewer shares when the price is high; the overall cost is lower than it would be if a constant number of shares were bought at set intervals. Dollar-cost-averaging does not assure a profit or protect against a loss in a declining market. Domestic Bond A bond denominated in the currency of the country in which it is issued. Duration Duration is a measure of a security's price sensitivity to changes in interest rates. Duration differs from maturity in that it considers a security's interest payments in addition to the amount of time until the security reaches maturity, and also takes into account certain maturity shortening features (e.g., demand features, interest rate resets, and call options) when applicable. Securities with longer durations generally tend to be more sensitive to interest rate changes than securities with shorter durations. A fund with a longer average duration generally can be expected to be more sensitive to interest rate changes than a fund with a shorter average duration.
E Earnings Per Share (EPS) A measure of a company's earnings or profitability. EPS is calculated by dividing net income for the past 12 months by the number of outstanding common shares of the company. Emerging Market A securities market that is of smaller size or that has a short operating history. Emerging Market Fund A fund that invests primarily in emerging market countries. Emerging-Markets Bond Emerging-markets bond portfolios invest more than 65% of their assets in foreign bonds from developing countries. The largest portion of the emerging-markets bond market comes from Latin America, followed by Eastern Europe. Africa, the Middle East, and Asia make up the rest. Employee Stock Ownership Plan (ESOP) A type of employee benefit plan that invests primarily in stock of the company sponsoring the retirement plan. Employer Securities See Company Stock. Equity Energy Equity energy portfolios invest primarily in equity securities of U.S. or non-U.S. companies who conduct business primarily in energy-related industries. This includes and is not limited to companies in alternative energy, coal, exploration, oil and gas services, pipelines, natural gas services, and refineries. Equity Fund A fund that invests primarily in equities. Equity Precious Metals Precious-metals portfolios focus on mining stocks, though some do own small amounts of gold bullion. Most portfolios concentrate on gold-mining stocks, but some have significant exposure to silver-, platinum-, and base-metal-mining stocks as well. Precious-metals companies are typically based in North America, Australia, or South Africa. Equity Wash Equity wash is a provision of a stable value product whereby direct transfers between certain competing funds must be directed to an equity fund or other non-competing fund option of the plan for a stated period of time (usually 90 days) before such transferred funds may be directed to any other plan-provided competing fixed income option. Equity/Equities A security or investment representing an ownership in a corporation, unlike a bond, which represents a loan to a borrower. Often used interchangeably with "stock. Equity-Income Funds with this objective are expected to pursue current income by investing at least 65% of their assets in dividend-paying equity securities. Eurobond An international bond issued and traded outside the country of the borrower and outside the regulations of a single country. Also called a global bond. Eurodollar U.S. dollars held by foreign institutions outside the United States. Commonly used for settlement of international transactions. Europe Stock Europe-stock portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in Europe. Most of these portfolios emphasize the region's larger and more developed markets, including Britain, the Netherlands, Germany, France, and Switzerland. Many also invest in the region's smaller markets, including the emerging markets of eastern Europe. Excessive Trading A policy that limits the number of times you can exchange into and out of a fund within a given time frame. This is intended to discourage frequent trading that increases the costs to all the fund's investors. Also referred to as Frequent Trading New . Exchange Rate The price at which one currency trades for another. Exchange Traded Fund (ETF) A security that tracks an index and represents a basket of stocks like an index mutual fund, but trades like a stock on an exchange. Ex-Dividend Date The day that a fund's Board of Directors declares the amount of income or capital gain to be distributed to shareholders and deducts that amount from the fund's net asset value. Exp Cap (Board) Expense Cap is a limit that the fund company has placed on the level of the expenses borne by the fund. The cap is contractual and indicates the maximum level of expenses (with certain exceptions) that the fund would be paying at that time. Subject to board approval, the Expense Cap may be terminated or revised, which may lower the fund's yield and return. Expense Cap Expense cap is a limit that has been placed on the level of the expenses borne by the fund. Expense Cap (Shareholder) Expense Cap is a limit that the fund company has placed on the level of the expenses borne by the fund. The cap is contractual and indicates the maximum level of expenses (with certain exceptions) that the fund would be paying at that time. Subject to share holder approval, the Expense Cap may be terminated or revised, which may lower the fund�s yield and return. Expense Cap (Voluntary) Expense Cap is a limit that the fund company has placed on the level of the expenses borne by the fund. The cap is voluntary and indicates the maximum level of expenses (with certain exceptions) that the fund would be paying at that time. The Expense Cap may be terminated or revised at any time, which may lower the fund's yield and return. Expense Ratio (Gross) Expense ratio is a measure of what it costs to operate an investment, expressed as a percentage of its assets, as a dollar amount, or in basis points. These are costs the investor pays through a reduction in the investment's rate of return. For a mutual fund, the gross expense ratio is the total annual fund or class operating expenses from the fund's most recent prospectus (before waivers or reimbursements) paid by the fund. If the investment option is not a mutual fund, the expense ratio may be calculated using methodologies that differ from those used for mutual funds. Keep in mind the cumulative effect of fees and expenses can substantially reduce the growth of your retirement savings, but is only one of many factors to consider when you decide to invest in an option. Visit the Department of Labor's website for an example of the long-term effect of fees and expenses. Expense Ratio (Net) Expense ratio is a measure of what it costs to operate an investment, expressed as a percentage of its assets, as a dollar amount, or in basis points. These are costs the investor pays through a reduction in the investment's rate of return. For a mutual fund, the net expense ratio is the total annual fund or class operating expense from the fund's most recent prospectus, after any fee waiver and/or expense reimbursements that will reduce any fund operating expenses for no less than one year from the effective date of the fund's registration statement. This number does not include any fee waiver arrangement or expense reimbursement that may be terminated without agreement of the fund's board of trustees during the one-year period. If the investment option is not a mutual fund, the expense ratio may be calculated using methodologies that differ from those used for mutual funds.
F FDIC (Federal Deposit Insurance Corporation) A federal agency that insures funds on deposit (currently up to $250,000) in member banks and thrift institutions. Federal Home Mortgage Corporation (FHLMC or "Freddie Mac") A federally created corporation established to facilitate the financing of single-family residential housing by creating and maintaining an active secondary market for conventional home mortgages. Federal National Mortgage Association (FNMA or "Fannie Mae") A government-sponsored private corporation authorized to purchase and sell mortgages and to otherwise facilitate the orderly operation of a secondary market for home mortgages. Fee Table The mutual fund prospectus table that describes the fee structure of the mutual fund, including fees paid by investors when they buy or sell fund shares and the fees and other expenses paid directly by the fund. Fee Waivers From time to time, portions of a fund's expenses are waived for a certain period. Fee waivers increase a fund's yield and total return. Fee waivers are outlined in fund prospectuses. Contact the fund's distributor to ensure that the waiver is still active at the time of investment. Financial Financial portfolios seek capital appreciation by investing primarily in equity securities of U.S. or non-U.S. financial-services companies, including banks, brokerage firms, insurance companies, and consumer credit providers. Financial Industry Regulatory Authority (FINRA) A self-regulatory organization for all securities firms doing business in the United States that operates under the supervision of the SEC. The organization's objectives are to protect investors and ensure market integrity. Financial Statements The written record of the financial status of a mutual fund or company, usually published in the annual report. The financial statements generally include a balance sheet, income statement, and other financial statements. Fiscal Year End The completion of a mutual fund's one-year, or 12-month, accounting period. A fund's fiscal year-end does not necessarily need to fall on December 31, and can actually fall on any day throughout the year. Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. Fixed Income Style Map StyleMap® depictions use data and calculations provided by Morningstar, Inc. They provide an estimate characteristics of a fund's fixed income holdings over two dimensions: credit risk and interest rate sensitivity. The percentage of fund assets represented by these holdings is indicated beside each StyleMap. Current StyleMap characteristics are calculated each time Portfolio holdings are denoted with a dot. Historical StyleMap characteristics are represented by the shading of the box(es) previously occupied by the dot. For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates. Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years. Fixed Return Investment An investment with a stated rate of return to the investor for the term of the investment. Foreign Large Blend Foreign large-blend portfolios invest in a variety of big international stocks. Most of these portfolios divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These portfolios primarily invest in stocks that have market caps in the top 70% of each economically integrated market (such as Europe or Asia ex-Japan). The blend style is assigned to portfolios where neither growth nor value characteristics predominate. These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Large Growth Foreign large-growth portfolios focus on high-priced growth stocks, mainly outside of the United States. Most of these portfolios divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These portfolios primarily invest in stocks that have market caps in the top 70% of each economically integrated market (such as Europe or Asia ex-Japan). Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Large Value Foreign large-value portfolios invest mainly in big international stocks that are less expensive or growing more slowly than other large-cap stocks. Most of these portfolios divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These portfolios primarily invest in stocks that have market caps in the top 70% of each economically integrated market (such as Europe or Asia ex-Japan). Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Small/Mid Blend Foreign small/mid-blend portfolios invest in a variety of international stocks that are smaller. These portfolios primarily invest in stocks that fall in the bottom 30% of each economically integrated market (such as Europe or Asia ex-Japan). The blend style is assigned to portfolios where neither growth nor value characteristics predominate. These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Small/Mid Growth Foreign small/mid-growth portfolios invest in international stocks that are smaller, growing faster, and higher-priced than other stocks. These portfolios primarily invest in stocks that fall in the bottom 30% of each economically integrated market (such as Europe or Asia ex-Japan). Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Small/Mid Value Foreign small/mid-value portfolios invest in international stocks that are smaller and less expensive than other stocks. These portfolios primarily invest in stocks that fall in the bottom 30% of each economically integrated market (such as Europe or Asia ex-Japan). Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). These portfolios typically will have less than 20% of assets invested in U.S. stocks. Foreign Stock These funds invest primarily in equity securities of issuers located outside the United States. Foreign investments include political and economic uncertainties of foreign countries as well as the risk of currency fluctuations. These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less established markets and economies. Front-End Load (Initial Sales Charge) The initial sales charge or front-end load is a fee charged at the time of purchase and is deducted from your investment in the fund. Fund Facts This section provides specific information about a fund, such as the day it first opened to new investors, its fiscal year end, and its ticker, which is used for identification purposes. Fund Family A group or "complex" of mutual funds, each typically with its own investment objective, offered and generally managed by the same company. Fund Manager(s) The person or the management company with management responsibility for the fund and its investments. Fund Name A version of the fund's legal name. Fund of Funds A mutual fund or other pooled investment that invests in other mutual funds or pooled investments. Fund Risk and Return Contains a range of data points that show how a fund has performed over time and the amount that returns have deviated from its benchmark. Futures, Options, and Swaps Financial instruments sometimes used by mutual funds for a number of different purposes, including hedging certain types of risk, make speculative investments on the movement of the value of an underlying asset, to obtain exposure to an area that it is not possible to invest in directly, or create optionability where the value of the derivative is linked to a specific condition or event.
G General Obligation Bond (GO) A municipal bond which is backed by the full faith and credit (taxing and borrowing power) of a municipality. Glide Path Generally, the change over time in a target date fund's asset allocation mix to shift from a more aggressive strategy to a more conservative strategy. Global Depositary Receipts (GDR) Depositary receipts that are eligible for settlement outside the U.S. GDRs may be issued in New York, London, or Brussels and made eligible for use in the U.S. markets. Global Fund A fund that invests primarily in securities anywhere in the world, including the United States. Global Real Estate Global real estate portfolios invest primarily in non-U.S. real estate securities but may also invest in U.S. real estate securities. Securities that these portfolios purchase include: debt & equity securities, convertible securities, and securities issued by real estate investment trusts and REIT-like entities. Portfolios in this category also invest in real estate operating companies. Government Bond General These offerings pursue income by investing in a combination of mortgage-backed securities, Treasuries, and agency securities. Although the fund may be comprised of securities backed by the full faith and credit of the U.S. Government for the prompt payment of principal and interest at maturity, the fund itself is not guaranteed by the U.S. Government. Government Bond Mortgage Funds in this objective seek income by generally investing at least 65% of their assets in securities backed by mortgages, such as securities issued by the: Government National Mortgage Association (GNMA) Federal National Mortgage Association (FNMA) Federal Home Loan Mortgage Corporation (FHLMC). Although the fund may be comprised of securities backed by the full faith and credit of the U.S. Government for the prompt payment of principal and interest at maturity, the fund itself is not guaranteed by the U.S. Government. Government Bond Treasury Treasury funds seek income by generally investing at least 80% of their assets in U.S. Treasury securities. Although the fund may be comprised of securities backed by the full faith and credit of the U.S. Government for the prompt payment of principal and interest at maturity, the fund itself is not guaranteed by the U.S. Government. Government National Mortgage Association (GNMA or "Ginnie Mae") An agency of the federal Department of Housing and Urban Development empowered to provide special assistance in financing home mortgages which is responsible for management and liquidation of federally owned mortgage portfolios. GNMA guarantees, with the full faith and credit of the U.S. Government, full and timely payment on mortgage-backed securities. Government Securities Any debt obligation issued by a government or its agencies (e.g., Treasury Bills issued by United States). Growth and Income Fund A fund that has a dual strategy of growth or capital appreciation and current income generation through dividends or interest payments. Growth Fund A fund that invests primarily in the stocks of companies that have the potential for above-average gains. These companies often pay small or no dividends and their stock prices tend to have the most ups and downs from day to day. Growth of Hypothetical $10,000 This data point, usually shown as a graph, shows how the value of a hypothetical investment of $10,000 in a fund would have changed over time. It can also be used to compare the fund's historical performance against a benchmark or Morningstar Category average. This measurement does not include fees, although it assumes the reinvestment of all dividend and capital gains distributions. Growth Stocks Stocks of companies that have shown or are expected to show rapid earnings and revenue growth. Growth stocks are riskier investments than most other stocks and usually make little or no dividend payments to shareholders.
H Health Health portfolios focus on the medical and health-care industries. Most invest in a range of companies, buying everything from pharmaceutical and medical-device makers to HMOs, hospitals, and nursing homes. A few portfolios concentrate on just one industry segment, such as service providers or biotechnology firms. High Yield Municipal These funds invest at least 50% of assets in high-income municipal securities that are not rated or that are rated by a major agency such as Standard & Poor's or Moody's at the level of BBB (considered speculative in the municipal industry) and below. High-Yield Bond High-yield bond portfolios concentrate on lower-quality bonds, which are riskier than those of higher-quality companies. These portfolios generally offer higher yields than other types of portfolios, but they are also more vulnerable to economic and credit risk. These portfolios primarily invest in U.S. high-income debt securities where at least 65% or more of bond assets are not rated or are rated by a major agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below. High-Yield Funds High yield funds may invest in lower quality debt securities, which generally offer higher yields, but also carry more risk. High-Yield Muni High-yield muni portfolios invest at least 50% of assets in high-income municipal securities that are not rated or that are rated by a major agency such as Standard & Poor's or Moody's at the level of BBB (considered part of the high-yield universe within the municipal industry) and below. Historical Fund Information Information detailing a fund's historical changes and announcements. Historical Fund Performance Provides a measure of a fund's returns over time. Cap gains and dividends shown are per share amounts and net assets represent total assets on the last business day of each year.
I Inception Date The date on which the fund commenced operations. Income Annuity With an income annuity, an insurance company will provide you with an income guaranteed for as long as you live in return for a lump sum purchase. Your income represents a combination of both interest and principal. Once payments begin, no withdrawals or surrenders are allowed. There are fixed and variable income annuities.
Income Fund A fund that primarily seeks current income rather than capital appreciation. Income/Distributions For tax purposes, a mutual fund generally passes along dividends and interest it receives from securities it owns. A fund also passes along your share of the profits it makes when it sells securities for a higher price than it paid for them. You may choose to have these distributions sent to you or you may want to reinvest them. Distributions are subject to federal tax, and may also be subject to state or local taxes. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. Index A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value. The most common indexes for stocks or stock funds are the Dow Jones Industrial Average and the Standard and Poor's 500 Index. Index Funds A mutual fund that attempts to match the results of a specific index, such as the S&P 500®. Most index funds are passively managed and have lower turnover rates than actively managed mutual funds, which can help keep fees lower. India Equity India-stock portfolios emphasize companies based in India. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in India. Industrials Industrial portfolios seek capital appreciation by investing in equity securities of U.S. or non-U.S. companies that are engaged in services related to cyclical industries. This includes and is not limited to companies in aerospace and defense, automotive, chemicals, construction, environmental services, machinery, paper, and transportation. Inflation The overall general upward price movement of goods and services in an economy. Inflation is one of the major risks to investors over the long term because it erodes the purchasing power of their savings. Inflation Risk The chance that the value of assets or income will be diminished as inflation shrinks the value of a currency. Inflation-Protected Bond Inflation-protected bond portfolios invest primarily in debt securities that adjust their principal values in line with the rate of inflation. These bonds can be issued by any organization, but the U.S. Treasury is currently the largest issuer for these types of securities. Interest The amount paid by a borrower as compensation for the use of borrowed money. This amount is generally expressed as an annual percentage of the principal amount. Interest Rate The annual rate, expressed as a percentage of principal, payable for use of borrowed money. Interest Rate Risk The possibility that a bond's or bond fund's market value will decrease due to rising interest rates. Interest Rate Sensitivity Also known as duration, it's the degree to which a bond or bond fund reacts to changes in the interest rate environment. Intermediate Government Intermediate-government portfolios have at least 90% of their bond holdings in bonds backed by the U.S. government or by government-linked agencies. This backing minimizes the credit risk of these portfolios, as the U.S. government is unlikely to default on its debt. These portfolios have durations typically between 3.5 and 6.0 years. Consequently, the group's performance--and its level of volatility--tends to fall between that of the short government and long government bond categories. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Intermediate is defined as 75% to 125% of the three-year average effective duration of the MCBI. Intermediate-Term Bond Intermediate-term bond portfolios invest primarily in corporate and other investment-grade U.S. fixed-income issues and typically have durations of 3.5 to 6.0 years. These portfolios are less sensitive to interest rates, and therefore less volatile, than portfolios that have longer durations. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Intermediate-term is defined as 75% to 125% of the three-year average effective duration of the MCBI. International Fund A fund that invests primarily in the securities of companies located outside the United States. International Monetary Fund (IMF) The International Monetary Fund (IMF) is an organization of nearly 200 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Investment Adviser A person or organization employed by a mutual fund or an individual to give professional advice on investments and asset management practices. Investment Company An entity that pools the assets of shareholders and invests in securities that meet stated investment objectives for individual or institutional clients. The most common type of investment company is an open-end fund, commonly known as a mutual fund, which continuously offers its shares and will redeem shares at any time at its net asset value. Investment Grade or Investment Grade Bond The broad credit designation given to corporate and municipal bonds which have a high probability of being paid and minor, if any, speculative features. Bonds rated Baa and higher by Moody's Investors Service or BBB and higher by Standard & Poor's are deemed by those agencies to be "investment grade. Investment Manager A fiduciary, usually a bank, insurance company, or registered investment adviser, with the power to manage, acquire or dispose of specified assets. Investment Objective The stated goal that an investment option seeks to achieve, such as growth or income. Investment Return The gain or loss on an investment over a certain period, expressed as a percentage. Income and capital gains are included in calculating the investment return. Investment Risk The possibility of losing some or all of the amounts invested or not gaining value in an investment. Issue Date The date on which a security is deemed to be issued or originated. Issuer Generally, the issuer of a mutual fund is the fund or trust which issues the shares; the issuer of a collective investment trust is the underlying trust or investment vehicle which issues the units; the issuer of a stock fund is the company which issues the shares; the issuer of investment options such as separate accounts and strategies is the plan which makes them available; the issuer of a fixed return option is the insurance company or other company which offers the investment; and the issuer of an annuity contract is the insurance company and/or the insurance company separate account.
J-K Japan Stock Japan-stock portfolios emphasize companies based in Japan. The Japanese stock market is one of the largest in the world, so these portfolios' holdings vary significantly. Some portfolios concentrate on Japan's larger companies, while others concentrate on the nation's smaller firms. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in Japan. Junk Bond A bond rated lower than Baa/BBB, also called a "high-yield" bond. Junk bonds are speculative compared with investment grade bonds.
L Large Blend Large-blend portfolios are fairly representative of the overall U.S. stock market in size, growth rates, and price. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. These portfolios tend to invest across the spectrum of U.S. industries, and owing to their broad exposure, the portfolios' returns are often similar to those of the S&P 500 Index. Large Cap Stocks Stocks of companies with a large market capitalization. Large caps tend to be well-established companies, so their stocks typically entail less risk than smaller caps, but large-caps also offer less potential for dramatic growth. Large Capitalization (Cap) A reference to either a large company stock or mutual fund that invests in the stocks of large companies. A company is generally considered to be a large capitalization stock when it has a total value or market capitalization (dollar value of outstanding shares) of at least $10 billion. Large Growth Large-growth portfolios invest primarily in big U.S. companies that are projected to grow faster than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Most of these portfolios focus on companies in rapidly expanding industries. Large Value Large-value portfolios invest primarily in big U.S. companies that are less expensive or growing more slowly than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). Latin America Stock Latin America stock portfolios invest almost exclusively in stocks from Latin America. Most of these portfolios strongly favor the area's large markets, specifically Brazil, Mexico, and Argentina. Smaller markets such as Peru or Colombia aren't generally as well-represented in these portfolios. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in Latin America. Leveraged Net Long Leveraged net long portfolios seek income by establishing long and short positions in securities. The most common strategy for leveraged net long portfolios is to take long positions in securities that have been identified as attractive and short positions in securities that have been identified as overvalued. These portfolios typically hold long positions in securities with an aggregate value of up to 130% of its net assets. In addition, these portfolios will establish short positions in securities with a market value of up to 30% of its net assets. The net long exposure therefore remains 100%, but it is a leveraged exposure. This category is only used in Morningstar's custom fund and separate account databases. Lifecycle Fund A fund designed to provide varying degrees of long-term appreciation and capital preservation based on an investor's age or target retirement date through a mix of asset classes. The mix changes over time to become less focused on growth and more focused on income. Also known as a target date fund. Lifestyle Fund A fund that is designed to maintain a predetermined risk level and generally uses words such as "conservative," "moderate," or "aggressive" in its name to indicate the fund's risk level. Used interchangeably with "target risk fund". Lipper Lipper Analytical Services, Inc. is a nationally recognized organization that reports on mutual fund total return performance and calculates fund rankings. Lipper Balanced Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Balanced Funds Average is comprised of funds whose primary objective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. Lipper CA Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper CA Municipal Debt Funds Average is comprised of funds that limit their assets to those securities that are exempt from taxation in California (double tax exempt). Lipper Capital Appreciation Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Capital Appreciation Funds Average is comprised of funds that aim at maximum capital appreciation, frequently by means of 100% or more portfolio turnover, leveraging, purchasing unregistered securities, purchasing options, etc. These funds may take large cash positions. Lipper Convertible Securities Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Convertible Securities Funds Average is comprised of funds that invest primarily in convertible bonds and/or convertible preferred stock. Lipper Corporate Debt Funds A-Rated Average The Lipper Corporate A-Rated Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Corporate Debt Funds BBB-Rated Average The Lipper Corporate BBB Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Emerging Markets Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Emerging Markets Debt Funds Average is comprised of funds that seek either current income or total return by investing primarily in emerging market debt securities, where "emerging market" is defined by a country's gross national product per capita or other economic measures. Lipper Emerging Markets Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Emerging Markets Funds Average is comprised of funds that seek long-term capital appreciation by investing primarily in emerging market equity securities, where "emerging market" is defined by a country's gross national product per capita or other economic measures. Lipper Equity Income Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Equity Income Funds Average is comprised of funds that seek relatively high current income and growth of income through investing 60% or more of their portfolios in equities. Lipper European Region Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper European Region Funds Average is comprised of funds that concentrate their investments in equity securities whose primary trading markets or operations are concentrated in the European region or in a single country within this region. Lipper Flexible Portfolio Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Flexible Portfolio Funds Average is comprised of funds that allocate their investments across various asset classes, including domestic common stocks, bonds, and money market instruments with a focus on total return. Lipper Funds Averages Lipper Analytical Services, Inc., is a nationally recognized organization that uses mutual fund total return performance to calculate a fund's rankings against its peer averages, or universes of funds with similar investment objectives. Lipper General Bond Funds Average The Lipper General Bond Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper General Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper General Municipal Debt Funds Average is comprised of funds that invest primarily in municipal debt issues in the top four credit ratings. Lipper General U.S. Government Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper General U.S. Government Funds Average is comprised of funds that invest primarily in securities issued by U.S. government or U.S. government agencies. Lipper General U.S. Treasury Funds Average The Lipper General U.S. Treasury Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Global Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Global Funds Average is comprised of funds that invest at least 25% of their portfolios in securities traded outside of the United States and that may own U.S. securities as well. Lipper Global Income Funds Average The Lipper Global Income Fund Average is a total return performance average of funds tracked by Lipper, Inc. that invest primarily in U.S. dollar and non-U.S. dollar debt securities of issuers located in at least three countries, one of which may be the United States. It does not reflect deductions for fees, expenses or taxes. Lipper Global Large-Cap Growth Funds Average The Lipper Global Large-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Global Small-Cap Funds Average The Lipper Global Small-Cap Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper GNMA Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper GNMA Funds Average is comprised of funds that invest primarily in Government National Mortgage Association securities. Lipper Growth & Income Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Growth & Income Funds Average is comprised of funds that combine a growth-of-earnings orientation and an income requirement for level and/or rising dividends. Lipper Growth Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Growth Funds Average is comprised of funds that invest in companies with long-term earnings expected to grow significantly faster than the earnings of the stocks represented in the major unmanaged stock indices. Lipper High Current Yield Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper High Current Yield Funds Average is comprised of funds that seek high (relative) current yield from fixed income securities, have no quality or maturity restrictions, and tend to invest in lower grade debt securities. Lipper Income Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Income Funds Average is comprised of funds that normally seek a high level of current income through investing in income-producing stocks, bonds, and money market instruments. Lipper Intermediate Investment Grade Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Intermediate Investment Grade Debt Funds Average is comprised of funds that invest primarily in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of 5 -10 years. Lipper Intermediate Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Intermediate Municipal Debt Funds Average is comprised of funds that invest in municipal debt issues with dollar-weighted average maturities of 5 - 10 years. Lipper International Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper International Funds Average is comprised of funds that invest in securities with primary trading markets outside of the United States. Lipper International Income Funds Average The Lipper Intl Income Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper International Large-Cap Growth Funds Average The Lipper International Large-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper International Large-Cap Value Funds Average The Lipper International Large-Cap Value Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper International Multi-Cap Core Funds Average The Lipper International Multi-Cap Core Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper International Multi-Cap Value Funds Average The Lipper International Multi-Cap Value Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper International Small/Mid-Cap Growth Funds Average The Lipper International Small/Mid Cap Growth Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Japanese Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Japanese Funds Average is comprised of funds that concentrate their investments in equity securities of Japanese companies. Lipper Large-Cap Core Funds Average The Lipper Large-Cap Core Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Large-Cap Growth Funds Average The Lipper Large-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Large-Cap Value Funds Average The Lipper Large-Cap Value Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Latin American Funds Average The Lipper Latin American Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper MA Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper MA Municipal Debt Funds Average is comprised of funds that limit their assets to those securities that are exempt from taxation in Massachusetts (double tax exempt). Lipper Mid Cap Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Mid-Cap Funds Average is comprised of funds that invest primarily in companies with market capitalizations less than $5 billion at the time of purchase. Lipper Mid-Cap Core Funds Average The Lipper Mid-Cap Core Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mid-Cap Growth Funds Average The Lipper Mid-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mixed-Asset Target 2010 Average The Lipper Mixed-Asset Target 2010 Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mixed-Asset Target 2020 Average The Lipper Mixed-Asset Target 2020 Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mixed-Asset Target 2030 Average The Lipper Mixed-Asset Target 2030 Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mixed-Asset Target 2040 Average The Lipper Mixed-Asset Target 2040 Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Mixed-Asset Target 2050 Average The Lipper Mixed-Asset Target 2050 Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Money Market Instrument Funds Average Includes funds that invest in high quality financial instruments rated in top two grades with dollar-weighted average maturities of less than 90 days. Intend to keep constant net asset value. Lipper Multi-Cap Core Funds Average The Lipper Multi-Cap Core Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Multi-Cap Growth Funds Average The Lipper Multi-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Multi-Sector Income Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Multi-Sector Income Funds Average is comprised of funds that seek current income by allocating assets among different fixed income securities sectors (not primarily one sector except for defensive purposes) including U.S. & foreign governments with a significant portion rated below investment grade. Lipper NY Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper NY Municipal Debt Funds Average is comprised of funds that limit their assets to those securities that are exempt from taxation in New York (double tax exempt). Lipper Pacific ex Japan Funds Average The Lipper Pacific Region ex Japan Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Pacific Region Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Pacific Region Funds Average is comprised of funds that concentrate their investments in equity securities with primary trading markets or operations concentrated in the western Pacific Basin region or a single country within this region. Lipper Ranking Fund ranking calculated quarterly or annually by Lipper Analytical Services. Each fund is ranked within a universe of funds similar in investment objective. Lipper Real Estate Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Real Estate Funds Average is comprised of funds that invest primarily in equity securities of domestic and foreign companies engaged in the real estate industry. Lipper S&P 500® Index Objective Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper S&P 500® Index Objective Funds Average is comprised of passively managed, limited-expense (management fee no higher than 0.50%) fund designed to replicate the performance of the Standard & Poor's 500 Index on a reinvested basis. Lipper Short Investment Grade Debt Funds The Lipper Short Investment Grade Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Short Investment Grade Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Short Investment Grade Debt Funds Average is comprised of funds that invest primarily in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of less than 1 year. Lipper Short-Intermediate Investment Grade Debt Funds The Lipper Short Intermediate Investment Grade Debt Fund Average is a total return performance average of funds tracked by Lipper, Inc. that invest at least 65% of their assets in investment-grade debt issues (rated in the top four grades) with dollar-weighted average maturities of one to five years. It does not reflect deductions for fees, expenses or taxes. Lipper Short-Intermediate Investment Grade Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Short-Intermediate Investment Grade Debt Funds Average is comprised of funds that invests primarily in investment grade debt issues (rated in top four grades) with dollar-weighted average maturities of 1 -5 years. Lipper Short-Intermediate Municipal Debt Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Short-Intermediate Municipal Debt Funds Average is comprised of funds that invest in municipal debt issues with dollar-weighted average maturities of 1 - 5 years. Lipper Short-Intermediate U.S. Government Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Short-Intermediate U.S. Government Funds Average is comprised of funds that invest primarily in securities issued or guaranteed by the U.S. government, its agencies, or its instrumentalities, with dollar-weighted averages maturities of 1 - 5 years. Lipper Small Cap Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Small Cap Funds Average is comprised of funds that invest primarily in companies with market capitalizations less than $1 billion at the time of purchase. Lipper Small-Cap Core Funds Average The Lipper Small-Cap Core Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Small-Cap Growth Funds Average The Lipper Small-Cap Growth Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Small-Cap Value Funds Average The Lipper Small-Cap Value Funds Average reflects the performance of mutual funds with similar portfolio characteristics and capitalization tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Telecommunication Funds The Lipper Telecommunication Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Telecommunication Funds Average The Lipper Telecommunication Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper U.S. Government Money Market Funds The Lipper U.S. Govt MM Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper U.S. Government Money Market Funds Average The Lipper U.S. Govt MM Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper U.S. Mortgage Funds Average The Lipper U.S. Mortgage Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Ultra Short Obligation Funds The Lipper Ultra Short Obligation Funds Average reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. and excludes the effect of sales charges. Lipper Ultra Short Obligation Funds Average Lipper Analytics, Inc. calculates peer averages based on universes of funds with the same investment objective. The Lipper Ultra Short Obligation Funds Average is comprised of funds that invest primarily in debt issues with ratings of investment grade or better, and maintain a portfolio dollar-weighted average maturity between 91 days and 365 days. Liquidity The ability to buy or sell an asset quickly or the ability to convert to cash quickly. Load A sales charge added to the price of the fund that must be paid at the time of purchase. Mutual funds that don't have any sales charges are called no-load funds. Not all funds charge a load; check a mutual fund's prospectus for more details. Load-Adjusted Return These total returns represent the change in share price and include the reinvestment of all dividends and capital gains, if any, and are adjusted downward to account for sales charges and redemption fees. Returns are listed for the trailing one-, three-, five-, and 10-year periods. For funds with front-end loads, the full amount of the load is deducted. For deferred or back-end loads, the percentage charged often declines the longer shares are held. This charge, often coupled with a 12b-1 fee, usually disappears entirely after several years. Click on a fund name for more information. Long Bond The 30-year bond is the longest maturity issued by the U.S. Treasury. It is also the most widely traded bond, not only in the United States but worldwide. Because it is such a key security, the most recently issued 30-year Treasury bond, known as the "long bond", is viewed as the benchmark against which all other bonds are measured. Long Government Long-government portfolios have at least 90% of their bond holdings invested in bonds backed by the U.S. government or by government-linked agencies. This backing minimizes the credit risk of these portfolios, as the U.S. government is unlikely to default on its debt. They are not risk-free, though. Because these portfolios have durations of typically more than 6.0 years, they are more sensitive to interest rates, and thus riskier, than portfolios that have shorter durations. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Long term is defined as 125% of the three-year average effective duration of the MCBI. Long-Short Equity Long-short portfolios hold sizable stakes in both long and short positions in equities and related derivatives. Some funds that fall into this category will shift their exposure to long and short positions depending on their macro outlook or the opportunities they uncover through bottom up research. Some funds may simply hedge long stock positions through exchange-traded funds or derivatives. At least 75% of the assets are in equity securities or derivatives. Long-Term Bond Long-term bond portfolios invest primarily in corporate and other investment-grade U.S. fixed income issues and typically have durations of more than 6.0 years. Because of their long durations, these portfolios are exposed to greater interest-rate risk. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Long-term is defined as 125% of the three-year average effective duration of the MCBI. Major Market Sectors Fidelity uses the joint classification system developed by Morgan Stanley Capital International and Standard & Poor's (MSCI/S&P) in categorizing the major market sectors. These sectors are: Consumer Discretionary, which consists of Auto Parts and Equipment, Tires and Rubber, Automobile Manufacturers, Motorcycle Manufacturers, Consumer Electronics, Home Furnishings, Homebuilding, Household Appliances, Housewares and Specialties, Leisure Products, Photographic Products, Apparel and Accessories, Footwear, Textiles, Casinos and Gambling, Hotels, Leisure Facilities, Restaurants, Advertising, Broadcasting and Cable TV, Movies and Entertainment, Publishing and Printing, Distributors, Catalog Retail, Internet Retail, Department Stores, General Merchandise Stores, Apparel Retail, Computer and Electronics Retail, Home Improvement Retail, and Specialty Stores. Consumer Staples, which consists of Drug Retail, Food Distributors, Food Retail, Brewers, Distillers and Vintners, Soft Drinks, Agricultural Products, Meat, Poultry and Fish, Packaged Goods, Tobacco, Household Products, and Personal Products. Energy, which consists of Oil and Gas Drilling, Oil and Gas Equipment and Services, Integrated Oil and Gas, Oil and Gas Exploration and Production, and Oil and Gas Refining and Marketing. Financials, which consists of Banks, Consumer Finance, Diversified Financial Services, Multi-Sector Holdings, Insurance Brokers, Life and Health Insurance, Multiline Insurance, Property and Casualty Insurance, Reinsurance, Real Estate Investment Trusts (REITS), and Real Estate Management and Development. Health Care, which consists of Health Care Equipment, Health Care Supplies, Health Care Distributors and Services, Health Care Facilities, Managed Health Care, Biotechnology, and Pharmaceuticals. Industrials, which consists of Aerospace and Defense, Building Products, Construction and Engineering, Electrical Components and Equipment, Heavy Electrical Equipment, Industrial Conglomerates, Construction and Farm Machinery, Industrial Machinery, Trading Companies and Distributors, Commercial Printing, Data Processing Services, Diversified Commercial Services, Employment Services, Environmental Services, Office Services and Supplies, Air Freight and Couriers, Airlines, Marine, Railroads, Trucking, Airport Services, Highway and Railtracks, and Marine Ports and Services. Information Technology, which consists of Internet Software and Services, IT Consulting and Services, Application Software, Systems Software, Networking Equipment, Telecommunication Equipment, Computer Hardware, Computer Storage and Peripherals, Electronic Equipment and Instruments, Office Electronics, Semiconductor Equipment, and Semiconductors. Materials, which consists of Commodity Chemicals, Diversified Chemicals, Fertilizers and Agricultural Chemicals, Industrial Gases, Specialty Chemicals, Construction Materials, Metal and Glass Containers, Paper Packaging, Aluminum, Diversified Metals and Mining, Gold, Precious Metals and Minerals, Steel, Forest Products, and Paper Products. Telecommunication Services, which consists of Alternative Carriers, Integrated Telecommunication Services, and Wireless Telecommunication Services. Utilities, which consists of Electric Utilities, Gas Utilities, Multi-Utilities, and Water Utilities.
M Managed Futures These funds primarily trade liquid global futures, options, swaps, and foreign exchange contracts, both listed and over-the-counter. A majority of these funds follow trend-following, price-momentum strategies. Other strategies included in this category are systematic mean reversion, discretionary global macro strategies, commodity index tracking, and other futures strategies. More than 60% of the fund's exposure is invested through derivative securities. These funds obtain exposure primarily through derivatives; the holdings are largely cash instruments. Management Fee A fee paid to an investment manager or advisor for its management services. A mutual fund's management fee will be included in the total annual operating expenses and disclosed in the Fee Table of the fund's prospectus. Manager Tenure Duration of the portfolio manager's employment managing a given fund or investment option. Market An order price type placed on the execution of an order. A market order requires that the best price in the current market at the time your order executes is used to buy or sell a security. Market Capitalization or Market Cap The total market value of a company's outstanding securities, excluding current liabilities. Market Neutral These funds attempt to reduce systematic risk created by factors such as exposures to sectors, market-cap ranges, investment styles, currencies, and/or countries. They try to achieve this by matching short positions within each area against long positions. These strategies are often managed as beta-neutral, dollar-neutral, or sector-neutral. A distinguishing feature of funds in this category is that they typically have low beta exposures (< 0.3 in absolute value) to market indexes such as MSCI World. In attempting to reduce systematic risk, these funds put the emphasis on issue selection, with profits dependent on their ability to sell short and buy long the correct securities. Market Price Last reported price at which a security was sold on an exchange. Market Risk The risk that the price of a security will rise or fall due to changing economic, political, or market conditions, or due to a company's individual situation. Maturity Distribution Maturity refers to the length of time until the date upon which a bond's principal must be repaid, also known as the maturity date. For fixed income mutual funds, maturity distribution shows the relative weighting of securities of specific maturities within the portfolio. Maturity or Maturity Date The date on which the principal amount of a loan, bond, or any other debt becomes due and is to be paid in full. Mid-Cap Blend The typical mid-cap blend portfolio invests in U.S. stocks of various sizes and styles, giving it a middle-of-the-road profile. Most shy away from high-priced growth stocks but aren't so price conscious that they land in value territory. The U.S. mid-cap range for market capitalization typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. Mid-Cap Growth Some mid-cap growth portfolios invest in stocks of all sizes, thus leading to a mid-cap profile, but others focus on midsize companies. Mid-cap growth portfolios target U.S. firms that are projected to grow faster than other mid-cap stocks, therefore commanding relatively higher prices. The U.S. mid-cap range for market capitalization typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Mid-cap Stocks An investment categorization based on the market capitalization of a company. Mid-Cap Value Some mid-cap value portfolios focus on medium-size companies while others land here because they own a mix of small-, mid-, and large-cap stocks. All look for U.S. stocks that are less expensive or growing more slowly than the market. The U.S. mid-cap range for market capitalization typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). Mid-Capitalization (Cap) A reference to either a medium sized company stock or mutual fund that invests in the stocks of medium-sized companies. A company is generally considered to be medium-sized or a mid-cap company when it has market capitalization (dollar value of outstanding shares) between $2 billion and $10 billion. MIL Rate An expression of the daily rate of per-share income earned in a bond or money market fund. Minimum Guaranteed Rate The lowest rate of return paid out by an annuity. This rate is stated in the annuity contract. Miscellaneous Sector Miscellaneous-sector portfolios invest in specific sectors that do not fit into any of Morningstar's existing sector categories and for which not enough funds exist to merit the creation of a separate category. Moderate Allocation Moderate-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold larger positions in stocks than conservative-allocation portfolios. These portfolios typically have 50% to 70% of assets in equities and the remainder in fixed income and cash. Money Manager allocation The Strategic Advisers Multi-Manager Funds can engage both Fidelity and non-Fidelity managers as subadvisers, as well as invest in Fidelity funds, third-party mutual funds, and exchange traded funds (ETFs). Subadvisers are professional money managers selected by SAI to manage a portion of the mutual fund's assets consistent with a specific investment mandate or area of expertise. The sub advisers make the day-to-day investment decisions for the portion of the fund they manage. Money Market Fund A mutual fund that primarily invests in short-term, high-grade fixed-income securities, such as Treasury bills, bank certificates of deposit, and commercial paper, and seeks the highest level of income consistent with preservation of capital (i.e., maintaining a stable share price). You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time. Morningstar Category In an effort to distinguish funds by what they own, as well as by their prospectus objectives and styles, Morningstar developed the Morningstar Categories. While the prospectus objective identifies a fund's investment goals based on the wording in the fund prospectus, the Morningstar Category classifies funds based on their investment styles as measured by their underlying portfolio holdings (portfolio statistics and compositions over the past three years). If the fund is new and has no portfolio, Morningstar estimates where it will fall before assigning a more permanent category. When necessary, Morningstar may change a category assignment based on current information. Morningstar Category Average Morningstar Category classifies funds based on their investment styles as measured by their holdings. Measurements such as returns, risk, and expenses are grouped by category, with the mean for each measurement serving as the average. Morningstar Overall Ratings The overall Morningstar RatingTM for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating metrics. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating (based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a funds monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Morningstar distributes the stars accordingly: " The top 10% of funds in each category receive 5 stars " the next 22.5% receive 4 stars " the next 35% receive 3 stars " the next 22.5% receive 2 stars " the bottom 10% receive 1 star Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages. Morningstar Return The Morningstar Return figure rates a fund's performance relative to other funds in its investment category. After adjusting for maximum front-end loads, applicable back-end loads, and applicable redemption fees, Morningstar calculates the excess return for each fund, defined as the fund's load-adjusted return minus the return for 90-day T-Bills over the same period. The use of excess instead of raw returns reflects our belief that mutual funds should be rated highly for only those returns earned beyond those of a T-Bill, which is essentially a risk-free investment. The excess returns are then compared with the higher of the average excess return of the fund's broad investment category or the 90-day T-Bill return. This last adjustment prevents distortions caused by having low or negative average excess returns in the equation's denominator, as might occur during a protracted down market. The return and risk assessments are based on a fund's historical performance relative to other funds in one of four broad investment categories (domestic equity, international equity, taxable bond, or municipal bond). It's important to realize that information is historical and purely quantitative. The assessments do not reflect Morningstar's opinion of the future potential of the fund; they only give a quick summary of how a fund has performed historically relative to its peers. Morningstar Risk The Morningstar Risk statistic evaluates the fund's downside volatility relative to that of other funds in its broad investment category. Morningstar uses a proprietary risk measure that operates differently from traditional risk measures, such as beta and standard deviation, which see both greater- and less than-expected returns as added volatility. Morningstar believes that most investors' greatest fear is losing money, defined as underperforming the risk-free rate of return an investor can earn from the 90-day Treasury bill, so its risk measure focuses only on that downside risk. To calculate the risk score, Morningstar plots monthly fund returns in relation to T-Bill returns. The amounts by which the fund trails the T-Bill return is added each month and that total is divided by the period's total number of months. This number, the average monthly underperformance statistic, is then compared with those of other funds in the same broad investment category to assign a risk score. The resulting risk score expresses how risky the fund is relative to the average fund in its category. Note that Morningstar does not rate any fund that has less than three years of performance data. Morningstar, Inc. A leading mutual fund research and tracking firm. Mortgage-Backed Securities (MBS) Securities backed by mortgages. Such certificates are issued by the Federal Home Loan Mortgage Corporation, and the Federal National Mortgage Association. Others are guaranteed by the Government National Mortgage Association. Investors receive payments out of the interest and principle on the underlying mortgages. Sometimes banks issue certificates backed by conventional mortgages, selling them to large institutional investors. The growth of mortgage-backed certificates and the secondary mortgage market in which they are traded has helped keep mortgage money available for home financing. Moving Averages An indicator frequently used in technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance. Multialternative These funds offer investors exposure to several different alternative investment tactics. Funds in this category have a majority of their assets exposed to alternative strategies. An investor's exposure to different tactics may change slightly over time in response to market movements. Funds in this category include both funds with static allocations to alternative strategies and funds tactically allocating among alternative strategies and asset classes. The gross short exposure is greater than 20%. Multisector Bond Multisector-bond portfolios seek income by diversifying their assets among several fixed income sectors, usually U.S. government obligations, U.S. corporate bonds, foreign bonds, and high-yield U.S. debt securities. These portfolios typically hold 35% to 65% of bond assets in securities that are not rated or are rated by a major agency such as Standard & Poor's or Moody's at the level of BB (considered speculative for taxable bonds) and below. Muni California Intermediate Muni California intermediate portfolios invest at least 80% of assets in California municipal debt. Because the income from these bonds is generally free from federal taxes and California state taxes, these portfolios are most appealing to residents of California. These portfolios have durations of 4.5 to 7.0 years (or, if duration is unavailable, average maturities of five to 12 years). Muni California Long Muni California long portfolios invest at least 80% of assets in California municipal debt. Because the income from these bonds is generally free from federal taxes and California state taxes, these portfolios are most appealing to residents of California. These portfolios have durations of more than 7.0 years (or, if duration is unavailable, average maturities of more than12 years). Muni Massachusetts Muni Massachusetts portfolios invest at least 80% of assets in Massachusetts municipal debt and can include long-, intermediate-, and short-duration portfolios. Because the income from these bonds is generally free from federal taxes and Massachusetts state taxes, these portfolios are most appealing to residents of Massachusetts. Muni Minnesota Muni Minnesota portfolios invest at least 80% of assets in Minnesota municipal debt and can include long-, intermediate-, and short-duration portfolios. Because the income from these bonds is generally free from federal taxes and Minnesota state taxes, these portfolios are most appealing to residents of Minnesota. Muni National Intermediate Muni national intermediate portfolios invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. To lower risk, these portfolios spread their assets across many states and sectors. These portfolios have durations of 4.5 to 7.0 years (or, if duration is unavailable, average maturities of five to 12 years). Muni National Long Muni national long portfolios invest in bonds issued by various state and local governments to fund public projects. The income from these bonds is generally free from federal taxes. To lower risk, these portfolios spread their assets across many states and sectors. These portfolios have durations of more than 7.0 years (or, if duration is unavailable, average maturities of more than 12 years). Muni National Short Muni national short portfolios invest in bonds issued by state and local governments to fund public projects. The income from these bonds is generally free from federal taxes and/or from state taxes in the issuing state. To lower risk, some of these portfolios spread their assets across many states and sectors. Other portfolios buy bonds from only one state in order to get the state-tax benefit. These portfolios have durations of less than 4.5 years (or, if duration is unavailable, average maturities of less than five years). Muni New Jersey Muni New Jersey portfolios invest at least 80% of assets in New Jersey municipal debt and can include long-, intermediate-, and short-duration portfolios. Because the income from these bonds is generally free from federal taxes and New Jersey state taxes, these portfolios are most appealing to residents of New Jersey. Muni New York Intermediate Muni New York intermediate portfolios invest at least 80% of assets in New York municipal debt. Because the income from these bonds is generally free from federal taxes and New York state taxes, these portfolios are most appealing to residents of New York. These portfolios have durations of 4.5 to 7.0 years (or, if duration is unavailable, average maturities of five to 12 years). Muni New York Long Muni New York long portfolios invest at least 80% of assets in New York municipal debt. Because the income from these bonds is generally free from federal taxes and New York state taxes, these portfolios are most appealing to residents of New York. These portfolios have durations of more than 7.0 years (or, if duration is unavailable, average maturities of more than 12 years). Muni Ohio Muni Ohio portfolios invest at least 80% of assets in Ohio municipal debt and can include long-, intermediate-, and short-duration portfolios. Because the income from these bonds is generally free from federal taxes and Ohio state taxes, these portfolios are most appealing to residents of Ohio. Muni Pennsylvania Muni Pennsylvania portfolios invest at least 80% of assets in Pennsylvania municipal debt and can include long-, intermediate-, and short-duration portfolios. Because the income from these bonds is generally free from federal taxes and Pennsylvania state taxes, these portfolios are most appealing to residents of Pennsylvania. Muni Single State Intermediate Muni single-state intermediate portfolios invest in bonds issued by state and local governments to fund public projects. The income from such bonds is generally free from federal taxes and from state taxes in the issuing state. To get the state-tax benefit, these portfolios buy bonds from only one state. These portfolios have durations of 4.5 to 7.0 years (or, if duration is unavailable, average maturities of five to 12 years). Muni Single State Long Muni single-state long portfolios invest in bonds issued by state and local governments to fund public projects. The income from such bonds is generally free from federal taxes and from state taxes in the issuing state. To get the state-tax benefit, these portfolios buy bonds from only one state. These portfolios have durations of more than 7.0 years (or, if duration is unavailable, average maturities of more than 12 years). Muni Single State Short Muni single-state short portfolios invest in bonds issued by state and local governments to fund public projects. The income from such bonds is generally free from federal taxes and from state taxes in the issuing state. To get the state-tax benefit, these portfolios buy bonds from only one state. These portfolios have durations of less than 4.5 years (or, if duration is unavailable, average maturities of less than five years). Municipal Securities A general term referring to securities issued by local governmental subdivisions such as cities, towns, villages, counties or special districts, as well as securities issued by states and political subdivisions or agencies of states. A prime feature of these securities is that interest on them is generally exempt from federal income taxes and, in some cases, state and local taxes too. Mutual Fund An investment that pools investors' money and invests it with a specific objective in mind. Investors do not own the securities purchased by the fund. Instead, they own shares in the fund. Mutual Fund Share Price The dollar value of one share of an investment in a mutual fund.
N Natural Resources Natural-resources portfolios focus on commodity-based industries such as energy, chemicals, minerals, and forest products in the United States or outside of the United States. Some portfolios invest across this spectrum to offer broad natural-resources exposure. Others concentrate heavily or even exclusively in specific industries. Portfolios that concentrate primarily in energy-related industries are part of the equity energy category. NAV Change The difference between today's closing net asset value (NAV) and the previous day's closing net asset value (NAV). NAV Change % The percentage change between mutual fund's current and previous day's closing net asset value (NAV). Net Asset Value (NAV) The dollar value of one mutual fund' share, excluding any sales charges or redemption fees. The NAV is calculated by subtracting liabilities from the value of a fund's total assets and dividing it by the number of fund' shares outstanding. Net Assets Difference between a company's total assets and liabilities. Net Unrealized Appreciation (NUA) The reference to special tax treatment that is available to participants who own employer securities in a qualified retirement plan if certain requirements are met. Net Yield Rate of return on a security net of out-of-pocket costs associated with its purchase, such as commissions or markups. New York Stock Exchange (NYSE) The largest stock exchange in the United States. It is a corporation, operated by a board of directors, and it is responsible for setting policy, supervising Exchange and member activities, listing securities, overseeing the transfer of members' seats on the Exchange and judging whether an applicant is qualified to be a specialist. Nominal Yield (Coupon Yield) The stated interest rate paid on a bond, computed by dividing the amount of annual income by the bond's par value. Non-Load Adj. Returns These total returns represent the change in share price and include the reinvestment of all dividends and capital gains, if any, but do not include the effect of sales charges and redemption fees. If these fees were included, the returns would be lower. Each fund's share price and return will vary and shares, when redeemed, may be worth more or less than their original cost. Click on the fund name for more information."YRedundant . Non-Load-Adjusted Returns These total returns represent the change in share price and include the reinvestment of all dividends and capital gains, if any, but do not include the effect of sales charges and redemption fees. If these fees were included, the returns would be lower. Returns are listed for the trailing one-, three-, five-, and 10-year periods. For funds that lack a 10-year history, Morningstar provides an annualized non-load-adjusted return figure for the period since the fund's inception. Each fund's share price and return will vary and shares, when redeemed, may be worth more or less than their original cost. Click on the fund name for more information. Note A debt obligation similar to a bond, but with a maturity date less than five years from date of issue. Nontraditional Bond The Nontraditional Bond category contains funds that pursue strategies divergent in one or more ways from conventional practice in the broader bond-fund universe. Many funds in this group describe themselves as "absolute return" portfolios, which seek to avoid losses and produce returns uncorrelated with the overall bond market; they employ a variety of methods to achieve those aims. Another large subset are self-described "unconstrained" portfolios that have more flexibility to invest tactically across a wide swath of individual sectors, including high-yield and foreign debt, and typically with very large allocations. Funds in the latter group typically have broad freedom to manage interest-rate sensitivity, but attempt to tactically manage those exposures in order to minimize volatility. The category is also home to a subset of portfolios that attempt to minimize volatility by maintaining short or ultra-short duration portfolios, but explicitly court significant credit and foreign bond market risk in order to generate high returns. Funds within this category often will use credit default swaps and other fixed income derivatives to a significant level within their portfolios. Note A debt obligation similar to a bond, but with a maturity date less than five years from date of issue.
O Offer Price The lowest price that a seller is willing to accept from a prospective buyer. In the case of a mutual fund with a sales charge, this price is the net asset value (NAV) plus the sales charge. In the case of no-load funds, it is the NAV. Offering Date The date on which a distribution of stocks or bonds will first be available to the public. Opportunity Risk The risk that a better opportunity may present itself after you have already committed your money elsewhere. Option Adjusted Duration Option adjusted duration estimates how much a bond's price fluctuates with changes in comparable interest rates. If rates rise 1.00%, for example, a fund with a 5-year duration is likely to lose about 5.00% of its value. Other factors also can influence a bond fund's performance and share price. A bond fund's actual performance may differ. Source: FMR Co.
P Pacific/Asia ex-Japan Stock Pacific/Asia ex-Japan stock portfolios cover a wide geographic range. Most of these portfolios focus on export-oriented nations such as Hong Kong, Singapore, Taiwan, and Korea. These portfolios invest at least 70% of total assets in equities and invest at least 75% of stock assets in Pacific countries, with less than 10% in Japan. Paper Any short-term debt security. Par The nominal or face value of a security as given on the certificate or instrument. The par value is the amount on which interest payments are calculated. Passive Management The process or approach to operating or managing a fund in a passive or non-active manner typically with the goal of mirroring an index. These funds are often referred to as index funds and differ from mutual funds that are actively managed. Payout Annuity When the assets in a tax-deferred annuity are converted into a guaranteed lifetime income, an annuity contract becomes a payout annuity. This is also known as asset becoming annuitized. Performance The results of an investment over a period of time. Portfolio A collection of investments such as stocks and bonds that are owned by an individual, organization or investment fund. Portfolio Data For Equity Funds, turnover rate is a measure of the fund's trading activity calculated by dividing total purchases or sales of portfolio securities (whichever is lower) by the fund's net assets. For the fixed income investments, duration estimates how much a bond fund's price will change with a change in comparable interest rates Weighted average maturity is a weighted average of all the maturities of the securities held in a fund. WAM can be used as a measure of sensitivity to interest rate changes and markets changes. For money market funds, weighted average life is the weighted average of the life of the securities held in a fund or portfolio and can be used as a measure of sensitivity to changes in liquidity and/or credit risk. Generally, the higher the value, the greater the sensitivity. Portfolio Diversification The makeup of a fund's portfolio expressed in terms of asset allocation and industry and sector diversification. Portfolio Turnover Rate A measure of how frequently investments are bought and sold within an investment option over a period of time, typically one year. The portfolio turnover rate is usually expressed as a percentage of the total value of an investment option. Portfolio Weight The percentage of a specific security or asset type that is contained in a mutual fund. Premium The amount by which a bond sells above its par (face) value. Present Value The value at the current time of a cash payment which is expected to be received in the future, discounted to reflect the fact that an amount received today could be invested to earn interest for the period to the future date. Price/Book The ratio of a company's current share price to reported accumulated profits and capital. Price/Cash Flow The ratio of a company's current share price to reported cash flow. Primary Market (New Issue Market) The market on which newly issued securities are sold, including government security auctions and underwriting purchases of blocks of new issues, which are then resold. Principal The original dollar amount of an investment. Principal may also be used to refer to the face value or original amount of a bond. Prospectus The official document that describes an investment to prospective investors. The prospectus contains information required by the SEC, such as investment objectives and policies, risks, services, and fees.
Q Quantitative Funds Mutual funds whose portfolio management decisions are based on quantitative analysis, which is usually developed using computerized statistical models of market behavior. Quarter-End Average Annual Total Returns Quarter-end Average annual total return is a rate of return on a quarterly basis that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variation in performance; they are not the same as actual year-by-year results.
R R2 A measurement of how closely the portfolio's performance correlates with the performance of a benchmark index, such as the S&P 500. R2 is a proportion which ranges between 0.00 and 1.00. An R2 of 1.00 indicates perfect correlation to the benchmark index, that is, all of the portfolio's fluctuations are explained by performance fluctuations of the index, while an R2 of 0.00 indicates no correlation. Therefore, the lower the R2, the more the fund's performance is affected by factors other than the market as measured by that benchmark index. Rate Information Displays payment data for an annuity, including the current and guaranteed payment rate and the period of time that the issuing company agrees to make payments. Rate of Return The gain or loss on an investment over a period of time. The rate of return is typically reported on an annual basis and expressed as a percentage. Ratings Designations used by investors' services to give relative indications of credit quality. Real Estate Real estate portfolios invest primarily in real estate investment trusts of various types. REITs are companies that develop and manage real estate properties. There are several different types of REITs, including apartment, factory-outlet, health-care, hotel, industrial, mortgage, office, and shopping center REITs. Some portfolios in this category also invest in real estate operating companies. Real Estate Investment Trust - REIT A company, usually traded publicly, that manages a portfolio for real estate to earn profits for shareholders. Real Rate of Return Rate of return on an investment adjusted for inflation. Rebalance The process of moving money from one type of investment to another to maintain a desired asset allocation. Redemption To sell fund shares back to the fund. Redemption can also mean the repayment of a bond on or before the agreed upon pay-off date. Redemption Fee See Short-Term Redemption Fee. Regional Diversification Holdings are presented to illustrate examples of the countries or regions which the fund may invest, and may not be representative of the fund's current or future investments. Percentages are displayed for the top sectors as of the countries or regions as of the date stated. Percentages shown describe the portion of the fund's total net assets, unless otherwise stated. Reinvesting Using any dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units. Reinvestment Price The price at which additional shares of a fund are purchased using the proceeds of money distributed by that fund, usually in the form of capital gains or dividends. Relative Volatility A ratio of a portfolio's standard deviation to the standard deviation of a benchmark index. Retirement Income Retirement income portfolios provide a mix of stocks, bonds, and cash for those investors already in or entering retirement. These portfolios tend to be managed to more of a conservative asset-allocation strategy. These portfolios aim to provide investors with steady income throughout retirement. Return The gain or loss on an investment. A positive return indicates a gain, and a negative return indicates a loss. Return Before Taxes Return before taxes is a measure of a fund's performance over a given time frame before accounting for the effect of taxes. Dividends generated by, and distributions made on, an investment, as well as gain or losses recognized upon sale of an investment, may be taxable. Taxes may reduce the value of the dividend, distribution or sale proceeds in the hands of the investor. As each investor's tax situation may differ, return before taxes provide a valuable benchmark against which an investor can easily compare the return before taxes of other investments without regard to tax consequences. Unless otherwise noted, returns are adjusted for all applicable recurring and non-recurring fees (including redemption fees), loads and charges, if any. Risk of this Category The Morningstar Risk statistic evaluates the fund's downside volatility relative to that of other funds in its broad investment category. Morningstar uses a proprietary risk measure that operates differently from traditional risk measures, such as beta and standard deviation, which see both greater- and less than-expected returns as added volatility. Morningstar believes that most investors' greatest fear is losing money, defined as underperforming the risk-free rate of return an investor can earn from the 90-day Treasury bill, so its risk measure focuses only on that downside risk. To calculate the risk score, Morningstar plots monthly fund returns in relation to T-Bill returns. The amounts by which the fund trails the T-Bill return is added each month and that total is divided by the period's total number of months. This number, the average monthly underperformance statistic, is then compared with those of other funds in the same broad investment category to assign a risk score. The resulting risk score expresses how risky the fund is relative to the average fund in its category. Note that Morningstar does not rate any fund that has less than three years of performance data. Risk Tolerance An investor's ability and willingness to lose some or all of an investment in exchange for greater potential returns.
S Sales Charge A charge for buying an investment. Sales Load A fee charged when you purchase shares in a mutual fund. It calculated as a percentage of the fund's offering price. Secondary Beneficiary The person or persons designated to receive death benefits in the event that the primary beneficiary predeceases the participant. Secondary Market The market for securities previously offered or sold. Sector Allocation That portion of a fund which invests in narrowly defined segments of the economy, i.e. utilities, healthcare services, telecommunications, etc. Sector Diversification This data represents the industries in which a fund invests. Sector Funds Sector funds invest in the stocks of one specific sector of the economy, such as health care, chemicals, or retailing. These funds tend to be more volatile than funds holding a diversified portfolio of stocks in many industries. Securities and Exchange Commission (SEC) Government agency created by Congress in 1934 to regulate the securities industry and to help protect investors. The SEC is responsible for ensuring that the securities markets operate fairly and honestly. Security A general term for stocks, bonds, mutual funds, and other investments. Self-Directed Brokerage Account An account in which a plan participant makes individual decisions about what stocks, bonds and mutual funds to buy through a brokerage window. Separate Account An insurance company account that is segregated or separate from the insurance company's general assets. Also refers to an investment option managed by an investment adviser for a single plan. Share A representation of ownership in a company or mutual fund. Share Class Some mutual funds and companies offer more than one type or group of shares, each of which is considered a class (e.g., "Class A," "Advisor" or "Institutional" shares). For mutual funds each class has different fees and expenses but all the classes invest in the same pool of securities and have the same investment objectives. A mutual fund's prospectus provides details regarding fees and expenses. Share Price The value of one share of either a stock or mutual fund. The share prices of stocks are recalculated throughout the trading today. With most mutual funds, the share price is calculated at the end of each trading day in response to movements of the securities in which the fund invests. Shareholder The owner of one or more shares of stock in a corporation or one or more shares or units of a mutual fund. Shareholder-Fees Any fee charged against your investment for purchase and sale, other than the total annual operating expenses. Sharpe Ratio (3-Year) The Sharpe ratio is a measure of historical adjusted performance calculated by dividing the fund's excess returns (fund's average monthly returns minus the average monthly return of the Salomon Smith Barney 3-Month T-Bill Index) by the standard deviation of those returns. The higher the ratio, the better the fund's return per unit of risk. Short Government Short-government portfolios have at least 90% of their bond holdings in bonds backed by the U.S. government or by government-linked agencies. This backing minimizes the credit risk of these portfolios, as the U.S. government is unlikely to default on its debt. These portfolios have durations typically between 1.0 and 3.5 years, so they have relatively less sensitivity to interest rates and, thus, low risk potential. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Short is defined as 25% to 75% of the three-year average effective duration of the MCBI. Short-Term Bond Short-term bond portfolios invest primarily in corporate and other investment-grade U.S. fixed income issues and typically have durations of 1.0 to 3.5 years. These portfolios are attractive to fairly conservative investors, because they are less sensitive to interest rates than portfolios with longer durations. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Short-term is defined as 25% to 75% of the three-year average effective duration of the MCBI. Short-Term Redemption Fee This fee is charged when money is withdrawn from a fund within a specified time period deemed "short-term," by the fund, commonly 30, 180, or 365 days. Please refer to the fund's prospectus for further details. Short-Term Redemption Fee Period The length of time a Short Term Redemption Fee is in effect, commonly 30, 180, or 365 days. Small Blend Small-blend portfolios favor U.S. firms at the smaller end of the market-capitalization range. Some aim to own an array of value and growth stocks while others employ a discipline that leads to holdings with valuations and growth rates close to the small-cap averages. Stocks in the bottom 10% of the capitalization of the U.S. equity market are defined as small cap. The blend style is assigned to portfolios where neither growth nor value characteristics predominate. Small Capitalization (Cap) A reference to either a small company stock or mutual fund that invests in the stocks of small companies. A company is generally considered small when it has a total value or market capitalization (dollar value of outstanding shares) of less than $2 billion. Small Growth Small-growth portfolios focus on faster-growing companies whose shares are at the lower end of the market-capitalization range. These portfolios tend to favor companies in up-and-coming industries or young firms in their early growth stages. Because these businesses are fast growing and often richly valued, their stocks tend to be volatile. Stocks in the bottom 10% of the capitalization of the U.S. equity market are defined as small cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Small Value Small-value portfolios invest in small U.S. companies with valuations and growth rates below other small-cap peers. Stocks in the bottom 10% of the capitalization of the U.S. equity market are defined as small cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow). Small-Cap Funds The securities of smaller, less-known companies may be more volatile than those of larger companies. Small-cap Stocks An investment categorization based on the market capitalization of a company. Source A source is the origin of your money in your retirement plan. Examples of sources include: employee contribution (the money you contribute), company match (the money your employer may contribute), and rollover money (the money that you may have rolled over into this plan from a prior employer's qualified retirement plan or an IRA). Stable Value Stable-value portfolios seek to provide income while preventing price fluctuations. The most common stable-value portfolios invest in a diversified portfolio of bonds and enter into wrapper agreements with financial companies to guarantee against fluctuations in their share prices. These wrapper agreements typically provide price stability on a day-to-day basis, thereby insulating each portfolio's net asset value from interest-rate volatility. Therefore, the duration for each of these funds is essentially zero. This category is only used in Morningstar's custom fund and separate account databases. Stable Value Fund A type of investment option that is designed to preserve principal while providing a consistent rate of return. Stable value funds invest primarily in fixed-income securities. Standard Deviation Statistical measure of how much a return varies over an extended period of time. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation does not indicate how an investment actually performed, but it does indicate the volatility of its returns over time. Stock A security that represents an ownership in a corporation. Stock Commissions Shows the trading costs incurred by funds, with the breakdown showing how different share quantities result in different commission rates. Stock Fund A fund that invests primarily in stocks. Stock Symbol An abbreviation using letters and numbers assigned to securities to identify them. Style Equity or stock funds are generally divided into three categories: Growth, Value, or Blend, which represents a combination of the two. The term growth is based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). The term value is based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow) that are expected to increase over time. Style Spectrum While "Style Spectrum" is not a term of art, it refers generally to the range of "growth vs. value" comparisons that many investors and advisory institutions use in understanding a mutual fund's investment style. To say that a fund is invested "across the style spectrum" indicates that it holds notable commitments to growth stocks, value stocks, and partial growth/value stocks. StyleMap StyleMap® depictions of mutual fund characteristics produced using data and calculations provided by Morningstar, Inc. StyleMapsSM estimate characteristics of a fund's equity holdings over two dimensions: market capitalization and valuation. The percentage of fund assets represented by these holdings is indicated beside each StyleMap. Current StyleMap characteristics are calculated each time Morningstar receives updated portfolio holdings from a fund and are denoted with a dot. Historical StyleMap characteristics are calculated for the shorter of either the past three years or the life of the fund, and are represented by the shading of the box(es) previously occupied by the dot. StyleMap characteristics represent an approximate profile of the fund's equity holdings (e.g., domestic stocks, foreign stocks, and American Depositary Receipts), are based on historical data, and are not predictive of the fund's future investments. Although the data are gathered from reliable sources, accuracy and completeness cannot be guaranteed. Summary Plan Description (SPD) A detailed, reader-friendly description of benefit plan provisions that must be provided to plan participants and beneficiaries. Summary Prospectus A short-form prospectus that mutual funds generally may use with investors if they make the long-form prospectus and additional information available online or in paper upon request. Surrender Penalty The amount of money an investor must pay when withdrawing funds from an annuity before a set period of time has transpired, often known as the Surrender Period.
T Takeover A change in the controlling interest of a corporation. A takeover may be a friendly acquisition or a hostile bid. A hostile takeover is usually attempted through a public tender offer. Target Date Fund A fund designed to provide varying degrees of long-term appreciation and capital preservation based on a target retirement date through a mix of asset classes. The mix changes over time to become less focused on growth and more focused on income. Also known as a lifecycle fund. Target Risk Fund A fund that maintains a predetermined asset mix and generally uses words such as "conservative," "moderate," or "aggressive" in its name to indicate the fund's risk level. Often used interchangeably with "lifestyle fund. Target-Date 2000-2010 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2000-2010) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2011-2015 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2011-2015) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2016-2020 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2016-2020) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2021-2025 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2021-2025) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2026-2030 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2026-2030) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2031-2035 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2031-2035) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2036-2040 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2036-2040) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2041-2045 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2041-2045) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2046-2050 Target-date portfolios provide diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2046-2050) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more conservative mixes as the target date approaches, following a preset glide path. A target-date portfolio is part of a series of funds offering multiple retirement dates to investors. Target-Date 2051+ Target-date portfolios provide a diversified exposure to stocks, bonds, and cash for those investors who have a specific date in mind (in this case, the years 2051 and beyond) for retirement. These portfolios aim to provide investors with an optimal level of return and risk, based solely on the target date. Management adjusts the allocation among asset classes to more-conservative mixes as the target date approaches, following a preset glide path. A target- date portfolio is part of a series of funds offering multiple retirement dates to investors. Targeted International Equity Funds Mutual funds that invest in stocks issued by companies located in specific countries or regions around the world. These funds can be divided into two general subcategories: Country/region funds generally invest in companies located in a specific country or geographical area, such as Germany or Asia-Pacific. Emerging market funds focus on the world's developing countries, where rapid industrialization may offer high potential gains, but may also lead to extreme volatility. Taxable Money Market These portfolios invest in short-term money market securities in order to provide a level of current income that is consistent with the preservation of capital. Tax-deferred Annuity An insurance contract, issued by an insurance company, that allows you to accumulate savings on a tax-deferred basis for long-term goals, such as retirement. There are fixed and variable tax-deferred annuities. With a fixed-deferred annuity, your savings earn a set rate of return, which is guaranteed by the issuing insurance company for a specific period of time. You choose an interest rate for a period of time, usually ranging from 1 to 10 years. With a variable-deferred annuity, you choose how to allocate the assets in your annuity among a number of managed portfolios, with options ranging from very conservative to very aggressive. You will have the flexibility to change your portfolio's allocations as your situation or market conditions change. Once you're retired and need income, you can turn the money accumulated in your annuity into a regular stream of income, or take partial withdrawals as the need arises. Tax-Free Money Market These portfolios invest in short-term municipal money market securities that are often exempt from some federal and state taxes. These funds provide current income and aim to preserve capital. Technicals Short-term trends that technical analysts can sometimes identify as significant in the price movement of a security or a commodity. Such trends may be in the demand and supply for securities, options, mutual funds, and commodities based on trading volume and price studies. Technical analysis is generally not concerned with the financial position of a company. Technology Technology portfolios buy high-tech businesses in the U.S. or outside of the U.S. Most concentrate on computer, semiconductor, software, networking, and Internet stocks. A few also buy medical-device and biotechnology stocks, and some concentrate on a single technology industry. Term The lifespan assigned to an asset or liability. Ticker Symbol An abbreviation using letters and numbers assigned to securities and indexes to identify them. Time Horizon The amount of time that an investor expects to stay invested in an investment before taking the money out. Top 10 Holdings The 10 holdings in which this fund had its largest investments, as of the date shown. For Fidelity funds, this information is updated monthly, with a one-month lag. For other funds, this information may be updated in this same timeframe or on a quarterly basis. Top 5 Issuers The top five bond issuers represented in the holdings of a fund. Top 5 States The top five states represented in the bond holdings of a fund. Total Annual Operating Expenses From the investor's perspective, this is the cost or part of the cost of investing in a mutual fund. From the mutual fund provider's perspective, this is the cost of operating the mutual fund. The total annual operating expense is generally expressed as a percentage or in basis points and is often also called the "expense ratio". Total Net Assets The figure is recorded in millions of dollars and represents the fund's total asset base, net of fees, and expenses, as of the indicated date included in the results matrix. Total Number of Holdings The aggregate number of all unique securities held in a mutual fund. Total Return Return on an investment, taking into account capital appreciation, dividends or interest, and individual tax considerations adjusted for present value and expressed on an annual basis. Trading Fee A fee you pay when you redeem, or sell, your shares. Not all funds charge trading fees. Trading Fee Period A period specified by a mutual fund during which you will be charged a fee for redeeming shares in the fund. Trading Symbol See Ticker Symbol. Trading-Inverse Commodities These funds seek to generate returns equal to an inverse multiple of short-term returns of a commodity index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve negative 2 times the returns of a given index on a daily basis is unlikely to deliver anything like negative 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple typically negative 1 to negative 3 times of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trading-Inverse Debt These funds seek to generate returns equal to an inverse fixed multiple of short-term returns of a fixed-income index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve negative 2 times the returns of a given index on a daily basis is unlikely to deliver anything like negative 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple typically negative 1 to negative 3 times of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trading-Inverse Equity These funds seek to generate returns equal to an inverse fixed multiple of short-term returns of an equity index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve negative 2 times the returns of a given index on a daily basis is unlikely to deliver anything like negative 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple typically negative 1 to negative 3 times the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trading-Leveraged Commodities These funds seek to generate returns equal to a fixed multiple of short-term returns of a commodity index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve 2 times the returns of a given index on a daily basis is unlikely to deliver anything like 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by traders. Trading-Leveraged Debt These funds seek to generate returns equal to a fixed multiple of the short-term returns of a fixed-income index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve 2 times the returns of a given index on a daily basis is unlikely to deliver anything like 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trading-Leveraged Equity These funds seek to generate returns equal to a fixed multiple of the short-term returns of an equity index. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve 2 times the returns of a given index on a daily basis is unlikely to deliver anything like 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trading-Miscellaneous These funds seek to generate returns equal to a fixed multiple (positive or negative) of short-term returns of an index. The reference index for this category is not equity, fixed-income, or commodity linked. The compounding of short-term returns results in performance that does not correspond to those of investing in the index with external leverage. For example, a fund attempting to achieve 2 times the returns of a given index on a daily basis is unlikely to deliver anything like 2 times the index's returns over periods longer than one day. Many of these funds seek to generate a multiple of the daily or weekly return of the reference index. Trading funds are not considered suitable for a long-term investor and are designed to be used by active traders. Trustee A person or entity (e.g., bank, trust company, or other organization) that is responsible for the safekeeping of trust assets. Turnover Rate See Portfolio Turnover Rate.
U U.S. Treasury Securities Debt securities issued by the U.S. government and secured by its full faith and credit for the prompt payment of principal and interest at maturity. Treasury securities are the debt financing instruments of the United States Federal government, and they are often referred to simply as Treasuries. U.S. Treasury STRIPS Zero-coupon bonds which pay principal and interest on maturity. Each fund compares its performance to the average of the total returns of two U.S. Treasury STRIPS (evenly weighted by par amount) that mature close to the fund's target maturity dates (August 15 and November 15 of the appropriate year). Ultrashort Bond Ultrashort-bond portfolios invest primarily in investment-grade U.S. fixed-income issues and have durations typically of less than one year. This category can include corporate or government ultrashort bond portfolios, but it excludes international, convertible, multisector, and high-yield bond portfolios. Because of their focus on bonds with very short durations, these portfolios offer minimal interest-rate sensitivity and therefore low risk and total return potential. Morningstar calculates monthly breakpoints using the effective duration of the Morningstar Core Bond Index in determining duration assignment. Ultrashort is defined as 25% of the three year average effective duration of the MCBI. Unit A representation of ownership in an investment that does not issue shares. US Dollar The US Dollar Index is an average of six major world exchange rates providing a general indication of the international value of the US dollar. The Intercontinental Exchange determines the value of the US Dollar Index by averaging the exchange rates between the USD and the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. The US Dollar Index is computed using a trade-weighted geometric average of six currencies. Utilities Utilities portfolios seek capital appreciation by investing primarily in equity securities of U.S. or non-U.S. public utilities including electric, gas, and telephone-service providers.
V Value A style of equity investing. A fund is said to be a value fund if it holds securities that have low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow) that are expected to increase over time. Value Date The date on which a foreign exchange transaction or a cash movement takes place. Can be used interchangeably with settlement date. Value Fund A fund that invests primarily in stocks that are believed to be priced below what they are really worth. Value Stocks Stocks that are considered to be undervalued based upon such ratios as price-to-book or price-to-earnings (P/E). These stocks generally have lower price-to-book and price-earnings ratios, higher dividend yields and lower forecasted growth rates than growth stocks. Variable Annuity An annuity where the customer has a choice where his contract value will be invested and which provides (with the exception of any minimum payment which may be guaranteed by an insurance company) that the customer bears the investment risks and receives the actual investment performance less certain charges. Variable Return Investment Investments for which the return is not fixed. This term includes stock and bond funds and also investments that seek to preserve principal like money market funds and stable value funds but do not guarantee a particular return. Volatility The amount and frequency of fluctuation in the price of a security, commodity, or a market within a specified time period. Generally, an investment with high volatility is said to have higher risk since there is an increased risk that the price of the security will have fallen when an investor wants to sell. Volatility Measures Volatility measures are based on the variability of historical returns of the portfolio. In the case of annuity funds, this is before the effect of annuity charges. Relative Volatility, Beta, and R2 compare a portfolio's total return to those of a relevant market, represented by the benchmark index. Standard Deviation is calculated independent of an index.
W Weighted Average Life (WAL) For money market funds, this is the weighted average of the life of the securities held in a fund or portfolio and can be used as a measure of sensitivity to changes in liquidity and/or credit risk. Generally, the higher the value, the greater the sensitivity. WAL is based on the dollar-weighted average length of time until principal payments must be paid, taking into account any call options exercised by the issuer and any permissible maturity shortening features other than interest rate resets. For money market funds, the difference between WAM and WAL is that WAM takes into account interest rate resets and WAL does not. WAL for money market funds is not the same as WAL of a mortgage- or asset-backed security. Weighted Average Maturity (WAM) This is a weighted average of all the maturities of the securities held in a fund. WAM can be used as a measure of sensitivity to interest rate changes and markets changes. Generally, the longer the maturity, the greater the sensitivity to such changes. WAM is based on the dollar-weighted average length of time until principal payments must be paid. Depending on the types of securities held in a fund, certain maturity shortening devices (e.g., demand features, interest rate resets, and call options) may be taken into account when calculating the WAM. Withholding Tax A tax assessed by the relevant tax authority on distributions, including dividends and capital gains. Tax rates of withholding amounts vary by transaction. World Allocation World-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. While these portfolios do explore the whole world, most of them focus on the U.S., Canada, Japan, and the larger markets in Europe. It is rare for such portfolios to invest more than 10% of their assets in emerging markets. These portfolios typically have at least 10% of assets in bonds, less than 70% of assets in stocks, and at least 40% of assets in non-U.S. stocks or bonds. World Bond World-bond portfolios invest 40% or more of their assets in foreign bonds. Some world-bond portfolios follow a conservative approach, favoring high-quality bonds from developed markets. Others are more adventurous and own some lower-quality bonds from developed or emerging markets. Some portfolios invest exclusively outside the U.S., while others regularly invest in both U.S. and non-U.S. bonds. World Stock World-stock portfolios have few geographical limitations. It is common for these portfolios to invest the majority of their assets in the U.S., Europe, and Japan, with the remainder divided among the globe's smaller markets. These portfolios typically have 20%-60% of assets in U.S. stocks. Wrap Fee A fee or expense that is added to or wrapped around an investment option to pay for one more services.
XYZ Yield The value of interest or dividend payments from an investment, usually stated as a percentage of investment price. Yield Curve The relationship at a given point in time between yields on a group of fixed-income securities with varying maturities -- commonly, Treasury bills, notes, and bonds. The curve typically slopes upward since longer maturities normally have higher yields, although it can be flat or even inverted. Yield To Call Yield on a bond assuming the bond will be redeemed by the issuer at the first call date specified. Yield To Maturity Used to determine the rate of return an investor will receive if a long-term, interest-bearing investment, such as a bond is held to its maturity date. It takes into account purchase price, redemption value, time to maturity, coupon yield and the time between interest payments. Yield Without Subsidy The yield without applicable waivers or reimbursements, whenever the fund is subsidizing all or a portion of the fund's expenses as of the current reporting period. Absent such waivers or reimbursements, the returns would have been lower. Waivers and/or reimbursements may be discontinued any time.
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