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Main Glossary

 

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Debt security. Security representing a loan that must be repaid to the lender at a future date. Bonds, notes, bills and money market instruments are common debt securities.

Derivative. Financial instrument whose value is based on the value of another underlying security.

Direct U.S. government obligations. Securities issued by the U.S. government such as Treasury Bills, Treasury Bonds, Treasury Notes, U.S. Savings Bonds and instruments issued by other government agencies. Ordinary income attributable to direct obligations may be exempt from state income tax. GNMA, FNMA and FHLMC securities do not meet the definition of direct U.S. government obligations.

Distribution. Payout to shareholders of net income, including net capital gain, earned by the fund.

Distribution rate(s). Percentage at which a mutual fund has distributed income to its shareholders. It is calculated by dividing a fund's annualized dividend amount by its current offering price. This differs from a fund's standardized (SEC) yield.

Diversification. Investment strategy of spreading investments among a wide variety of securities, potentially lowering risk by reducing the impact of any one security on overall portfolio performance.

Dividend. Distribution to shareholders that generally comes from the net income of a corporation (or net income of a mutual fund).

Dollar-cost averaging. Method of accumulating assets by investing a fixed amount of dollars in securities at set intervals. The investor buys more shares when the price is low and fewer shares when the price is high; the overall cost may be lower than it would be if buying a constant number of shares at set intervals.

Donor. An individual or organization making a contribution to a charity.

Dow Jones® Industrial Average (the Dow). The oldest and most quoted measure of stock market price movements. It is a price-weighted average of 30 actively traded blue chip stocks.

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