Glossary

Bankers acceptances are negotiable time drafts, or bills of exchange, that have been accepted by a bank which, by accepting, assumes the obligation to pay the holder of the draft the face amount of the instrument on the maturity date specified. They are used primarily to finance the export, import, shipment, or storage of goods.

The official document compiled to describe a fund.

A checking account or similar account from which transfers can be made to third parties. Demand deposit accounts, negotiable order of withdrawal (NOW) accounts, automatic transfer service (ATS) accounts, and credit union share draft accounts are examples of transaction accounts at banks and other depository institutions.

The federal government agency that supervises, charters, and insures federal credit unions. NCUA also insures state-chartered credit unions that apply and qualify for insurance. The NCUA also operates a credit facility for member credit unions.

Deposits denominated in U.S. dollars at banks and other financial institutions outside the United States. Although this name originated because of the large amounts of such deposits held at banks in Western Europe, similar deposits in other parts of the world are also called Eurodollars.

The distribution of investments over different sectors.

Short-term U.S. Treasury security having a maturity of up to one year and issued in denominations of $10,000 to $1 million. T-bills are sold at a discount: Investors purchase a bill at a price lower than the face value (for example, the investor might buy a $10,000 bill for $9,700) the return is the difference between the price paid and the amount received when the bill is sold or it matures (if held to maturity, the return on the T-bill in the example would be $300). T-bills are the type of security most frequently used in Federal Reserve open market operations.

Among its major provisions, this Act applied uniform reserve requirements to all depository institutions with certain types of accounts and required reports from these depository institutions. It also extended access to the Federal Reserve discount window and to other Federal Reserve services in step with the implementation of a fee schedule.

The distribution of the maturity dates of a fund's assets.

An institutional fund that feeds exclusively, or is allocated automatically, into other funds. It is a fund for other funds, not to be confused with a fund of funds. In the United States these structures are known under the term ""Master/Feeder"" funds or under the trade mark designation ""Hub and Spoke(r)"".

Official authorization needed for a fund to be traded on a stock exchange.

Nearly all of the nation's circulating paper currency consists of Federal Reserve notes printed by the Bureau of Engraving and Printing and issued to the Federal Reserve Banks which put them into circulation through commercial banks and other depository institutions. Federal Reserve notes are obligations of the US government.

Legal document whereas you agree to cooperate with clerical error corrections in the future with respect to your loan documents.

A security that is exempted from most provisions of the securities laws, including the margin rules. Such securities include US government and agency securities, municipal securities designated by the SEC.

A component of some finance charges, such as the fee for triggering an overdraft checking account into use.

An investment approach that focuses on decisions on market or sector weightings before deciding on specific investments.

Swiss security identification code for a transactions in Switzerland.

Anything that serves as a generally accepted medium of exchange, a standard of value, and a means to save or store purchasing power. In the US, paper currency (nearly all of which consists of Federal Reserve notes), coin and funds in checking and similar accounts at depository institutions are examples of money.

A large extra payment that may be charged at the end of a loan or lease.

International Securities Identification Number. See 'Security Number'.

Long-term security having a maturity of 10 years or longer issued in denominations of $1,000 or more. A 30-year bond is sometimes referred to as a long bond. Bonds pay interest semiannually, and the principal is payable at maturity.

The fee that is charged to investors to purchase or sell units of a fund. See 'Preliminary Charge' and 'Redemption Charge'.

The communications network of the Federal Reserve which interconnects Federal Reserve Bank offices, the Board of Governors, depository institutions, and the Treasury. It is used for Fedwire transfers, transfers of US securities, as well as for transfer of Federal Reserve administrative, supervisory, and monetary policy information.

Check Clearing for the 21st Century Act, or Check 21 was signed into law on October 28, 2003 and became effective October 28, 2004. Check 21 helps to reduce fraud and keeps your account information secure by producing a digital image of a check which is processed electronically.  An important thing to remember with Check 21 is that the check you write is no longer physically transported in order to complete the payment cycle thus dramatically reducing the time it takes for a check to clear your account. You need to make sure you have sufficient funds available in your account before you write a check as checks can now clear within the same day.

Legal responsibility to repay debt.

A graph depicting yield as it relates to maturity.

Another common term used for closed-end funds, especially in the United Kingdom. See 'Closed-end Fund'.

The date on which ends a twelve month accounting period.

Maximum interest rates that can be paid on savings and time deposits at federally insured commercial banks, mutual savings banks, savings and loan associations, and credit unions. Ceilings on credit union deposits are established by the National Credit Union Administration. Ceilings on deposits held by the other depository institutions are established by the Depository Institutions Deregulation Committee (DIDC). Under current law, deposit interest rate ceilings are being phased out over a six-year period, ending in 1986 under the oversight of the DIDC.

A Bank Draft is a check drawn by a bank against funds deposited in another bank. Sometimes referred to as a Payable Through Draft.

The issue price is determined on the basis of the net asset value. See 'Net Asset Value'.

Financial activities closely related to banking that may be engaged in by bank holding companies, either directly or through nonbank subsidiaries. Examples are owning finance companies and engaging in mortgage banking. The Board determines which activities are closely related to banking. Before making such activities permissible, the Board must also determine that performance of the activities by bank holding Companies is in the public interest.

List of the countries in which the fund has permission to be sold publicly in the local market.

Total increase in value over a certain period of time, expressed as a percentage of the initial value. It consists of income plus capital appreciation. The performance 1/3/5 years or since launch is the average annual performance over the last 12/36/60 months or since inception. The cumulative return is the total return since the initial investment. The return year-to-date (YTD) is the return from January 1st of the current year until today. The quarterly/monthly/annual returns are the total returns for every quarter/month/calendar year.

The fund provider may require a certain minimum number of units to buy or sell.

A deposit payable on demand, or a time deposit with a maturity period or required notice period of less than 14 days, on which the depository institution does not reserve the right to require at least 14 days written notice of intended withdrawal. Commonly takes the form of a checking account.

Repayment terms calling for gradual increases in the payments on a closed-end obligation. A graduated payment loan usually involves negative amortization.

A variety of systems and technologies for transferring funds (money) electronically rather than by check. Includes Fedwire, Bankwire, automated clearinghouses (ACHs), and other automated systems.

The yield to maturity (ytm) is an approximation for the return an investor would get if he kept a bond to maturity and reinvested all income receipts. The ytm of a bond fund is the weighted average ytm of all bonds in that fund.

A statutory body established by Congress in 1976. The Council, with 30 members who represent a broad range of consumer and creditor interests, advises the Board on the exercise of its responsibilities under the Consumer Credit Protection Act and on other matters on which the Board seeks its advice.

An interest earning account on which checks may be drawn. Withdrawals from NOW accounts may be subject to a 14-day or more notice requirement although such is rarely imposed. NOW accounts may be offered by commercial banks, mutual savings banks, and savings and loan associations and may be owned only by individuals and certain nonprofit organizations and governmental units.

The interest rate at which eligible depository institutions may borrow funds, usually for short periods, directly from the Federal Reserve Banks. The law requires the board of directors of each Reserve Bank to establish the discount rate every 14 days subject to the approval of the Board of Governors.

A type of variable rate involving a renewable short-term ""balloon"" note. The interest rate on the loan is generally fixed during the term of the note, but when the balloon comes due, the lender may refinance it at a higher rate. In order for the loan to be fully amortized, periodic refinancing may be necessary.

The number of outstanding shares in a company multiplied by the current market price per share.

Information ratio measures the difference between the annualized return of a fund and that of its benchmark divided by the tracking error. The higher this number, the better the compensation for the risk taken by the fund in relation to its benchmark.

The credit quality of debt instruments established by rating agencies such as Moody's or S&P.

The Federal Reserve funds transfer system. Fedwire is used for transferring reserve account balances of depository institutions and government securities. Fedwire is also used for the settlement of other clearing systems, such as CHIPS.

A document registered at the Land Title Office recording the change of ownership of a property.

A person who offers a property for sale.

A purchase in which the seller provides all or part of the financing.

An institution where mutual claims are settled between accounts of member depository institutions. Clearinghouses among banks have traditionally been organized for check-clearing purposes, but more recently have cleared other types of settlements, including electronic fund transfers.

A depository institution (commercial bank, mutual savings bank, savings and loan association, credit union, or US agency or branch of a foreign bank) that is not a member of the Federal Reserve System. Nonmember depository institutions that offer transaction accounts or nonpersonal time deposits are subject to reserve requirements set by the Federal Reserve, and they also have access to the Federal Reserve discount window and Federal Reserve services on the same terms as member banks.

The frequency with which a fund's assets are valued to establish the net asset value (NAV).

Government policy regarding taxation and spending. Fiscal policy is made by Congress and the Administration.

The total dollar amount paid to get credit.

Figurative expression for Federal Reserve facility for extending credit directly to eligible depository institutions (those with transaction accounts or nonpersonal time deposits).

Federal Home Loan Mortgage Corporation. Quasi-governmental agency that purchases conventional mortgages from insured depository institutions and HUD-approved mortgage bankers. 

A line of credit that may be used repeatedly up to a certain limit, also called a charge account or revolving credit.

The movement of checks from the banks or other depository institutions where they are deposited back to those on which they are written, and funds movement in the opposite direction. This process results in credits to accounts at the institutions of deposit and corresponding debits to the accounts at the paying institutions. The Federal Reserve participates in check clearing through its nationwide facilities, though many checks are cleared by private sector arrangements.

A percentage rate reflecting the total amount of dividends paid on an account based on the dividend rate and the frequency of compounding for a 365-day period (366 days during leap year).

Beta measures the sensitivity of the fund to its benchmark. The beta of the benchmark is 1.

Generally, any loan or credit sale agreement in which the amounts advanced, plus any finance charges, are expected to be repaid in full over a definite time. Most real estate and automobile loans are closed-end agreements.

One form in which Treasury and certain government agency securities are held. Book-entry form consists of an entry on the records of the US Treasury Department, a Federal Reserve Bank, or a financial institution.

When the Federal Reserve makes a matched sale-purchase agreement, it sells a security outright for immediate delivery to a dealer or foreign central bank, with an agreement to buy the security back on a specific date (usually within 7 days) at the same price. Matched sale-purchase agreements are the reverse of repurchase agreements and allow the Federal Reserve to withdraw reserves on a temporary basis.

The strategic distribution of available capital over various investment instruments: equities, bonds, money market, commodities and precious metal.

Intermediate-term security having a maturity of one to 10 years and issued in denominations of $1,000 or more. Notes pay interest semiannually, and the principal is payable at maturity.

Electronic transfer of funds usually involves large dollar payments.

An individual who establishes a trust. Synonymous with grantor, trustor.

An amount deducted from the regular price for those who purchase with cash instead of credit.

The best monthly return over the period observed.

Law requiring lenders to give borrowers advance notice of closing costs.

The BIS, located in Basle, Switzerland, was established in 1930 to administer the post-World War I reparations agreements. Since the 1960s, the BIS has evolved into an important international monetary institution, and has provided a forum in which central bankers meet and consult on a monthly basis. As an independent financial organization, the BIS performs a variety of banking, trustee, and agent functions, primarily with central banks. At present the BIS has 29 members, 28 of which are central banks. The Federal Reserve is represented at BIS meetings, but is not a member. The BIS is the only international financial institution in which most Eastern European countries are members. The Soviet Union, East Germany, and Albania, however, are not members.

Volatility measures the riskiness of the fund and is the standard deviation of monthly returns. The higher the volatility, the greater the likely fluctuations in the value of the fund. Annualizing converts the return to a 12 monthly rate.

Investment fund in the form of a publicly traded investment company. It collects money from investors through an initial public offering and uses this money to invest in securities. Contrary to an open-end fund, a closed-end fund does not issue shares continuously, nor is it obliged to repurchase shares at their net asset value. The shares of closed-end funds, like equities, trade on a stock exchange. The price at which the shares trade is called the market price. This may exceed (premium) or be less than (discount) than the net asset value.

A beneficiary or payable on death (POD) is the person(s) who takes ownership of funds in an account in the event of the account holder's death avoiding the probate process.

A collection of investments, often accounted for on a joint basis.

When the Federal Reserve makes a repurchase agreement with a government securities dealer, it buys a security for immediate delivery with an agreement to sell the security back at the same price by a specific date (usually within 15 days) and receives interest at a specific rate. This arrangement allows the Federal Reserve to inject reserves into the banking system on a temporary basis to meet a temporary need and to withdraw these reserves as soon as that need has passed.

A reconveyance is the official transfer of the property title after the mortgage has been paid in full.The processing time can vary based on the county in which the property is located and can take up to three months. You will need to contact your county for questions on their specific processing time.

Total income before taxes or expenses are deducted.

The rate at which money balances turn over in a period for expenditures on goods and services (often measured as the ratio of GNP to the money stock). A larger velocity means that a given quantity of money is associated with a greater dollar volume of transactions.

As the nation's central bank, the Federal Reserve has the authority and financial resources to act as ""lender of last resort"" by extending credit to depository institutions or to other entities in unusual circumstances involving a national or regional emergency, where failure to obtain credit would have a severe adverse impact on the economy.

Issuing charge levied to buy fund units.

Stands for the French term ""Valeur nette d'inventaire"" . See 'Net Asset Value (NAV)'.

In general, these facilities can accept time deposits from foreign customers free of reserve requirements and interest rate limitations, and can lend to foreigners if the funds are for the conduct of foreign business outside of the U.S. Net borrowing from these facilities by domestic banking offices is subject to reserve requirements.

This stands for the German term ""Netto Inventarwert"". See 'Net Asset Value (NAV)'.

Planning for the broad-range of maintenance and health services required for the chronically ill, disabled or retarded. Services may be provided on an inpatient (rehabilitation facility, nursing home, and mental hospital), outpatient, or at-home basis.

This group consists of one member from each Federal Reserve District (usually a banker) elected annually by the Board of Directors of each of the 12 Federal Reserve Banks. They meet with the Board to discuss business and financial conditions and make advisory recommendations.

A 12-member committee consisting of the seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York is a permanent member while the other Federal Reserve presidents serve on a rotating basis. The Committee sets objectives for the growth of money and credit that are implemented through purchases and sales of US government securities in the open market. The FOMC also establishes policy relating to System operations in the foreign exchange markets.

Average life is a weighted average of the remaining time to maturity, in years, of the bonds in the fund.

A significant decline in general economic activity extending over a period of time.

This stands for the French term ""Fonds commun de placement"", a form of open-end fund organized on the basis of a collective investment contract. Parties to this contractual agreement are the investor, the management company and the custodian bank. The fund's assets are property of the management company. By buying units in a FCP, the investor acquires a claim against the management company, which does not constitute a right of joint ownership, but is of a purely contractual nature. This form of fund is particularly prevalent in Continental Europe and is the only form possible to constitute an open-end fund under Swiss law.

The date a fund was first made available to investors. See 'Launch Date'.

The computation of costs payable at closing which determines the seller's net proceeds and the buyer's net payment.

A Power of Attorney or a POA is a legal document that gives another person legal authority to manage your financial affairs.

A company that owns or controls one or more banks. The Board of Governors has responsibility for regulating and supervising bank holding companies, such as approving acquisitions and mergers and inspecting the operations of such companies. This authority applies even though a bank owned by a holding company may be under the primary supervision of the Comptroller of the Currency or the FDIC.

A statistical system used to determine whether or not to grant credit by assigning numerical scores to various characteristics related to creditworthiness.

Another common term for investment funds, especially in the United States.

Tracking error measures the risk taken by a fund against its benchmark. It is the annualised standard deviation of the difference between the monthly returns of a fund and those of the benchmark.

Fund forming part of an umbrella fund. See 'Umbrella Fund'

An automated clearing system used primarily for international payments. This system is owned and operated by the New York Clearinghouse banks. It engages Fedwire for settlement.

This stands for ""Open-End-Investment-Company"" and is the corporate form, organized as a joint stock company, of an open-end fund.

United States security identification code for transactions in the USA. See 'Security Number'.

An international organization with 146 members, including the United States. The main functions of the International Monetary Fund are to lend funds to member nations to finance temporary balance of payments problems, to facilitate the expansion and balanced growth of international trade, and to promote international monetary cooperation among nations. The IMF also creates special drawing rights (SDRs), which provide member nations with a source of additional reserves. Member nations are required to subscribe to a Fund quota, paid mainly in their own currency. The IMF grew out of the Bretton Woods Conference of 1944.

International standard applied to the daily pricing of fund units. Using the forward pricing means that the precise unit price is not known at the time the order is placed. This method of subscribing ""blind"" ensures that no one has the edge in terms of information even in the event of major market fluctuations. Thus the interests of both existing investors and newcomers are safeguarded.

Payout yield represents the last dividend payment made as a percentage of the current net asset value of the fund. (Only for -A- shares which make annual distributions).

The fee that is charged to investors at the time of the sale of the fund units.

The maximum allowable interest rate of an adjustable rate mortgage.

An extra charge imposed on those who purchase with a credit card instead of cash. (Currently, surcharges for credit card purchases are prohibited.)

Credit risk or default risk is the possibility that a bond issuer will default either through failing to pay interest or repay principal.

Computer-controlled terminals located on the premises of financial institutions or elsewhere, through which customers may make deposits, withdrawals, or other transactions as they would through a bank teller. Other terms sometimes used to describe such terminals are customer-bank communications terminal (CBCT) and remote service unit (RSU). Groups of banks sometimes share ATM networks located throughout a region of the country that may include portions of several states.

A company that administers funds. The manager decides on investments on behalf of the funds and/or appoints specialist investment advisors. The manager is also responsible for the fund's bookkeeping and for the publication of annual or semi-annual reports.

Estate planning is the orderly handling, disposition and administration of an estate, which is all the assets a person possesses, when the owner dies. This includes drawing a will, setting up trusts and minimizing estate taxes.

Annual remuneration paid to the manager for managing the fund. The management fee is expressed as a percentage of the fund's assets. This fee is ""all inclusive"" in that it includes the fee of the Manager, Administrator, Investment Adviser and the basic fee of the Custodian and, except for the Clariden Russia Equity Fund, the fee for safe custody services rendered by the Custodian and the Sub-Depositary Bank and the exercise of controlling functions by the Custodian.

An individual appointed by a court to manage and distribute the estate of a person who died without leaving a will or leaving a will that failed to name an executor.

The creditor's right to take property or a portion of property offered as security.

Income and/or capital gains are distributed, usually once a year.

The currency in which the fund's accounts are reported and in which the net asset value is calculated also known as the denomination currency.

A fund construction that allows one legal entity to cover two or more segregated sub-funds (compartments), each with its own investment objective, separate account and portfolio of securities. An umbrella fund offers the possibility to have several funds under one roof (umbrella). Such schemes usually offer favourable switching terms between the sub-funds.

Compound interest is paid on the original principal and on the accumulated past interest.

This stands for ""year to date"" and is used in conjunction with performance details. This refers to the performance since the beginning of the year. The period under review is therefore a dynamic one.

An asset class is an investment instrument such as equity, bond, money market, commodities or precious metal.

A Successor Trustee is the person or institution that takes over the management of trust property when the original trustee has died or become incapacitated. 

Financial planning is the careful management of overall finances in order to meet each individuals life goals - life goals being purchasing a home, funding for education and retirement, etc...

The potential for price fluctuations as a result of foreign exchange movements.

The lending of securities for a fee against collateral.

The NAV of a fund unit corresponds to the market value of the fund on a given day, less the fund's liabilities, divided by the number of units in circulation. The issuing and redemption prices of the units are defined on the basis of the fund's NAV.

The value of the dollar pegged to, or expressed relative to, a market basket of selected foreign currencies. The Federal Reserve calculates a trade-weighted value of the dollar based on the weighted-average exchange value of the dollar against the currencies of 10 industrial countries.

A 1099 form is a tax form used by taxpayers and tax-exempt organizations to report financial information to the Internal Revenue Service.

Time of the day when the market value of a fund is calculated based on the then prevailing prices.

Usually describes a property free of mortgage interests.

The Credit Suisse Private Banking ""CSPB rating"" is based on a quantitative analysis. Different return and risk ratios are weighted to get an overall rating score. The range is between 1 (worst fund) and 10 (best fund) the numbers are continuous.

An institution that uses its funds chiefly to purchase financial assets (deposits, loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue: nondeposit intermediaries include, among others, life and property/casualty insurance companies and pension funds, whose claims are the policies they sell, or the promise to provide income after retirement depository intermediaries obtain funds mainly by accepting deposits from the public. The major depository institutions are listed below. Although historically they have specialized in certain types of credit, the powers of nonbank depository institutions have been broadened in recent years. For example, NOW accounts, credit union share drafts, and other services similar to checking accounts may be offered by thrift institutions.

A creditor's measure of a consumer's past and future ability and willingness to repay debts.

Zero-coupon bonds or zero-bonds are so named because they pay no interest. These bonds are issued at, and trade at, a discount to their maturity value. The investment return is therefore in the form of capital gain as opposed to income. See 'Bond'.

A depository institution that is a member of the Federal Reserve. All national banks are required to be System members, and state-chartered commercial banks and mutual savings banks may elect to become members. Member banks own stock in Federal Reserve Banks and elect some of the Reserve Bank directors.

This stands for ""Collateralized Loan Obligation"" and is a bond backed by a pool of high yield loans.

This stands for 'Investment Company with variable capital' and is an open-end fund. See 'OEIC' and 'SICAV'.

MI - The sum of currency held by the public, plus travelers' checks, plus demand deposits, plus other checkable deposits (i.e., negotiable order of withdrawal [NOW] accounts, and automatic transfer service [ATS] accounts, and credit union share drafts.) M2 - M1 plus savings accounts and small-denomination time deposits, plus shares in money market mutual funds (other than those restricted to institutional investors), plus overnight Eurodollars and repurchase agreements. M3 - M2 plus large-denomination time deposits at all depository institutions, large-denomination term repurchase agreements, and shares in money market mutual funds restricted to institutional investors.

The central bank of the United States created by Congress, consisting of a seven member Board of Governors in Washington, D.C., 12 regional Reserve Banks, and depository institutions that are subject to reserve requirements. All national banks are members state-chartered banks may elect to become members, and state members are supervised by the Board of Governors and the Reserve Banks. Reserve requirements established by the Federal Reserve Board apply to nonmember depository institutions as well as member banks. Both classes of institutions have access to Federal Reserve discount borrowing privileges and Federal Reserve services on an equal basis.

This stands for the French term ""Organisme de Placement Collectif en Valeurs Mobili'res"" and is an open-end fund in conformity with the EU directives. See 'UCITS'.

A mutual fund in which the investments are spread over different asset classes.

A certificate of deposit with a minimum maturity of 2 1/2 years offered by banks and thrift institutions to individuals. The interest rate on these certificates is related to the average yield on 2 1/2-year Treasury securities, in accordance with regulations issued by the Depository Institutions Deregulation Committee. There is no minimum denomination required on these certificates.

This stands for ""Collateralized Debt Obligation"" and is a bond backed by a pool of high yield bonds/loans.

A final inspection of a home to check for problems that may need to be corrected before closing.

A legal right or interest in a property that affects title and may lessen the property value.

This outlines the goal and broad strategy that the fund pursues.

Risked based lending it the practice of setting loan rates for individuals based on perceived credit risk. The most credit worthy borrowers receive the lowest loan rates while those deemed less credit worthy are charged higher loan rates.

The process of determining the amount of savings that is required to fund a child's education and developing an investment strategy utilizing a number of savings and investment options that is customized based on the number of years before the child begins to use the funds.

An organization chartered by the Federal Reserve to engage in international banking operations. The Board acts upon applications by U.S. and foreign banking organizations to establish Edge corporations. It also examines Edge corporations and their subsidiaries. The Edge corporation gets its name from Senator Walter Edge of New Jersey, the sponsor of the original legislation to permit formation of such organizations.

A bank that accepts deposits of and performs banking services for other depository institutions.

Deposit made by a buyer toward the down payment as evidence of good faith when the purchase agreement is signed.

Another person who signs for a loan and assumes equal liability for it.

A conventional loan that doesn't adhere to all of the guidelines set forth by the Federal National Mortgage Association.

Reserve balances that depository institutions lend each other, usually on an overnight basis. In addition, Federal funds include certain other kinds of borrowings by depository institutions from each other and from federal agencies.

The currency in which the fund's accounts are reported and in which the net asset value is calculated also known as the denomination currency.

A finance charge is a fee charged for the use of credit or the extension of existing credit. The finance charge showing on your statement is the amount of interest you have paid on your loans to date.  

This stands for ""Total expense ratio"" and is the annual operating cost of a fund (not just the basic annual management fee, but includes audit and other legal fees). The TER is expressed as a percentage of the fund's assets.

The Annual Percentage Yield (APY) is the yield your deposit will earn over the course of a year. The APY tells you how much you are actually making on your money and it is generally higher for accounts with more frequent compounding periods. The APY is unique because it takes compounding into account. Compounding is the process if receiving earnings on your earnings. APY Calculator.

This is an organization employed to give professional advice on the fund's investments.

The date on which a purchase or redemption of an investment fund is conducted.

Volatility measures the riskiness of the fund and is the standard deviation of monthly returns. The higher the volatility, the greater the likely fluctuations in the value of the fund. Annualizing converts the return to a 12 monthly rate.

Total value of goods and services produced in the economy.

The amount of physical output for each unit of productive input.

A unique code used to identify a particular security. For historic reasons, the same product may have several security identification codes stemming from different countries as each has its own identification code system.

Investment fund with variable capital, which issues new shares continuously and is obliged to redeem them on demand on the basis of their net asset value.

A fund that invests exclusively into another fund (a Feeder fund). See 'Feeder Fund'.

An order issued after notice and opportunity for hearing, requiring a depository institution, a holding company, or a depository institution official to terminate unlawful, unsafe, or unsound banking practices. Cease-and-desist orders are issued by the appropriate federal regulatory agencies under the Financial Institutions Supervisory Act and can be enforced directly by the courts.

Purchase or sale of the currency of one nation with that of another. Foreign exchange rates refer to the number of units of one currency needed to purchase one unit of another, or the value of one currency in terms of another.

This stands for the German term ""Organismus f'r Gemeinsame Anlagen in Wertpapieren"" and is an open-end fund in conformity with the EU directives. See 'UCITS'.

Any stock listed on a national securities exchange, any over-the-counter security approved by the SEC for trading in the national market system, or appearing on the Board's list of over-the-counter margin stock and most mutual funds.

Central bank of the United States and major regulatory agency for many commercial banks.

Services performed by the Federal Reserve Banks for the US government. These include maintaining deposit accounts for the Treasury Department, paying US government checks drawn on the Treasury, and issuing and redeeming savings bonds and other government securities.

Stands for the French term ""Société d'Investissement à Capital Fixe"" and is a closed-end fund in the form of a joint stock company. See 'Closed-end Fund'.

Pooling is the basic concept of investment funds. A fund pools the money of a number of investors to buy a portfolio of investments.

Concern of financial regulators with the safety and soundness of individual banks, involving the general and continuous oversight of the activities of this industry to ensure that banks are operated prudently and in accordance with applicable statutes and regulations.

A depositor's savings account from which funds may be transferred automatically to the same depositor's checking account to cover a check written or to maintain a minimum balance.

An independent agency of the U.S. government consisting of five members appointed by the President that administers comprehensive legislation governing the securities industry.

An open-end fund in the form of a trust. This form of organization is particularly common in Anglo-Saxon jurisdictions.

A card that resembles a credit card but which debits a transaction account (checking account) with the transfers occurring contemporaneously with the customer's purchases. A debit card may be machine readable, allowing for the activation of an automated teller machine or other automated payments equipment.

An investment approach which focuses on specific investments rather than on asset allocation or market weighting decisions.

A Federal Reserve check processing operation that clears checks drawn on depository institutions located within a specified area. RCPCs expedite collection and settlement of checks within the area on an overnight basis.

A written opinion of a property's value by a valuer.

An advisory group initiated by the Board in the 1960s to provide a forum for the exchange of views between the Board and members of the academic community in economics and banking.

A debt security not traded on the national securities exchange which meets certain Regulation T requirements as to size of original offering, available information, and status of interest payments.

LLC stands for Limited Liability Company. Because it is not a partnership or a corporation, the owners of an LLC are not partners or shareholders, they are ""members."" An LLC actually combines aspects of partnerships and corporations, so an LLC is less formal and more flexible than a typical corporation, yet offers protection as well as certain advantages that are much the same. For example, members cannot be found personally liable for company debts. Their assets are separate from the assets of the LLC so they cannot be seized.

The distribution of investments over various rating classes.

A unique code used to identify a particular security. For historic reasons, the same product may have several security identification codes stemming from different countries as each has its own identification code system.

A financing device that permits an existing loan to be refinanced and new money to be advanced at an interest rate between the rate charged on the old loan and the current market interest rate. The creditor combines or ""wraps"" the remainder of the old loan with the new loan at the intermediate rate.

Reserves that must be held against customer deposits of banks and other depository institutions. The reserve requirement ratio affects the expansion of deposits that can be supported by each additional dollar of reserves. The Board of Governors sets reserve requirements within limits specified by law for all depository institutions (including commercial banks, savings banks, savings and loan associations, credit unions, some industrial loan banks, and US agencies and branches of foreign banks) that have transaction accounts or nonpersonal time deposits. A lower reserve requirement allows more deposit and loan expansion and a higher reserve ratio permits less expansion.

Any person, other than a bank, engaged in the business of buying or selling securities on its own behalf or for others.

Systems designed for the movement of funds, payments, and money between financial institutions throughout the nation. The Federal Reserve plays a major role in the nation's payments mechanism through distribution of currency and coin, check processing, wire transfer of funds, and the operation of automated clearinghouses that transfer funds electronically among depository institutions. Federal Reserve payments mechanism services are made available to both member banks and nonmember depository institutions on the basis of uniform pricing schedules.

Funds set aside by depository institutions to meet reserve requirements. For member banks, reserve requirements are satisfied with holdings of vault cash and/or balances at the Federal Reserve Banks. Depository institutions that are not members of the Federal Reserve System may hold their reserves in the same manner, or they may pass the reserve balances through a correspondent institution to the Federal Reserve Banks.

The formulation and issuance by authorized agencies of specific rules or regulations, under governing law, for the conduct and structure of banking.

A fund that invests primarily in securities of a specific business sector. For example, a sector fund may specialize in the securities of telecommunication firms, or in companies that mine precious metals.

The Committee responsible for the orderly phase-out over a six-year period of interest rate ceilings on time and savings accounts at depository institutions. Voting members of the DIDC are the Secretary of the Treasury and the Chairmen of the Federal Reserve Board, Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, and National Credit Union Administration Board. The Comptroller of the Currency serves as a nonvoting member.

Bankers acceptances are negotiable time drafts, or bills of exchange, that have been accepted by a bank which, by accepting, assumes the obligation to pay the holder of the draft the face amount of the instrument on the maturity date specified. They are used primarily to finance the export, import, shipment, or storage of goods.

This measures past excess returns (annualized return less the return on a risk free cash asset) in relation to the volatility or risk of the fund. The higher the Sharpe ratio, the less risk has been run for a given level of return.

Full or partial payment of the principal before the due date. This might occur if the borrower makes extra payments, sells the property, or refinances the existing loan.

Cash kept on hand in a depository institution's vault to meet day-to-day business needs, such as cashing checks for customers can be counted as a portion of the institution's required reserves.

Standardized, exchange-traded contract for the future delivery or receipt of a specified amount of an asset at a specified price on a specified date.

Retirement planning is the provess of defining your retirement income goals/needs, determining how much savings is required upon retirement and the development of a savings plan to meet these goals.

A broker's demand upon a customer for cash, or securities needed to satisfy the required Regulation T downpayment for a purchase or short sale of securities.

Inception date of a fund. See 'Inception Date'.

The distribution of available funds for investments over various currencies.

The NAV of a fund unit corresponds to the market value of the fund on a given day, less the fund's liabilities, divided by the number of units in circulation. The issuing and redemption prices of the units are defined on the basis of the fund's NAV.

Checkbook money that for a period of time appears on the books of both the payor and payee due to the lag in the collection Process. Federal Reserve float often arises during the Federal Reserve's check collection process. In order to promote an efficient payments mechanism with certainty as to the date funds become available, the Federal Reserve has employed the policy of crediting the reserve accounts of depository institutions depositing checks according to an availability schedule before the Federal Reserve is able to obtain payment from others.

Performance fees are tied to the performance of a fund. These fees act as an incentive for the manager to perform well.

The times and frequency at which a fund may be bought and sold.

Refers to the amount by which merchandise imports exceed merchandise exports.

Private Mortgage Insurance (PMI) is insurance that is purchased by a home buyer that covers the lender's risk of loss. PMI is generally required by lenders when a home buyer's down payment is less than 20% of the purchase price of a home.

Equity is the interest or value which an owner has in real property over and above any liens against it.

United Kingdom securities identification code for transactions in the UK.

The index which serves as a means of measuring a fund's performance. Benchmarks enable investors to compare the performance of different fund managers and to make a balanced, objective judgement.

Description of the allowable uses of land, as set out by local councils or planning authorities.

A self-regulatory organization with jurisdiction over certain broker-dealers. The NASD requires member brokers to register, and conducts examinations for compliance with net capital requirements and other regulations. It also conducts market surveillance of the over-the-counter (OTC) securities market. NASDAQ is a subsidiary of the NASD which facilitates the trading of approximately 5,000 most active OTC issues through an electronically connected network.

The Comptrolloer of the Currency is an officer of the Treasury Department responsible for chartering national banks and has primary supervisory authority over them. All national banks are required to be members of the Federal Reserve System and are insured by the Federal Deposit Insurance Corporation.

The date on which an issuer promises to repay the face value of a debt instrument.

A description of a fund's investment approach. For example, an equity fund might have a growth- or value-oriented style or a bond fund might have an interest-sensitive style or a credit-sensitive style.

The price of investment fund units listed on a stock exchange or traded over the counter.

The promise to pay in the future in order to buy or borrow in the present. The right to defer payment of debt.

This stands for ""yield to maturity"", See 'Average Yield to Maturity'.

A record of how a person has borrowed and repaid debts. A credit report indicates how well a person has repaid those that he/she owes. This file also indicates your home address and employment information. Finally, any collections or judgements may appear on your credit report.

A record of how a person has borrowed and repaid debts.

A type of international money created by the IMF and allocated to its member nations. SDRs are an international reserve asset, although they are only accounting entries (not actual coin or paper, and not backed by precious metal). Subject to certain conditions of the IMF, a nation that has a balance of payments deficit can use SDRs to settle debts to another nation or to the IMF.

An annualized rate that is calculated by taking the dividends earned for a statement period and dividing it by the average daily balance in the account. This figure helps consumers understand how well their account is performing during a statement cycle.

German securities identification code for a transactions in Germany.

An Agreement corporation is a federally or state-chartered corporation that has entered into an agreement or understanding with the Board that it will not exercise any power that is impermissible for an Edge corporation.

Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United States, but which were acquired or engaged in before a particular date. Such activities may be continued under the ""grandfather"" clauses of the Bank Holding Company Act and the International Banking Act.

Federal law that guarantees the consumer the right to cancel a mortgage for a period of three business days following the signing of the documents if the subject loan is a refinance of the borrower's primary residence.

Non-government organizations that have statutory responsibility to regulate their own members such as the NYSE, AMEX, and NASD.

Defines the fund domicile, the law by which the fund is regulated, the form of incorporation and the registration for public distribution. It is especially important for tax reasons.

This stands for Exchange Traded Funds. Also known as ""composite"" or ""index shares"". ETF's are backed by a basket of securities. They track either the performance of an index (like the Xmatch from CS that tracks the SMI(r)) or hold a static baskets of shares (like the HOLDRS(r) from Merrill Lynch that hold a specified number of stock in specific US sectors, i.e. B2B Internet or Biotech) and are dealt on an Exchange. ETF's trade like any other stock (stop loss, limit orders and short sales) and are lendable and marginable. Redemption and subscription can only be made in form of the underlying securities of the ETF in large amounts. Retail clients are restricted to dealing on an Exchange.

A rise, over time, in the average level of prices.

Credit risk or default risk is the possibility that a bond issuer will default either through failing to pay interest or repay principal.

The return is the difference between the end - period value of the fund and its beginning - period value expressed as a percentage of that beginning - period value. The return includes changes in the capital values of the fund's investments as well as the income receipts of the fund. Annualizing converts the return to a 12 monthly rate.

Total increase in value over a certain period of time, expressed as a percentage of the initial value. It consists of income plus capital appreciation. The performance 1/3/5 years or since launch is the average annual performance over the last 12/36/60 months or since inception. The cumulative return is the total return since the initial investment. The return year-to-date (YTD) is the return from January 1st of the current year until today. The quarterly/monthly/annual returns are the total returns for every quarter/month/calendar year.

A lump sum payment made to the creditor by the borrower or by a third party to reduce the amount of some or all of the consumer's periodic payments to repay the indebtedness.

Any card, plate, or coupon book that may be used repeatedly to borrow money or buy goods and services on credit.

Number of days that pass until the transaction amount is either deducted or credited to the client account once the order has been executed.

Another term for a high yielding bond fund. See 'High Yield Bond Fund'.

The Net Asset Value of a fund unit corresponds to the market value of the fund on a given day, less the fund's liabilities, divided by the number of units in circulation. The issuing and redemption prices of the units are defined on the basis of the fund's NAV.

Commercial Banks are allowed to engage in more varied lending activities and to offer more financial services than are the other depository institutions. Commercial banks are owned by stockholders and operated for profit.

A computer-based clearing and settlement operation, often operated by a Federal Reserve Bank, established for the exchange of electronic transactions among participating depository institutions. Such electronic transactions can be substituted for paper checks used to make recurring payments such as payroll or preauthorized insurance premiums. The U.S. Treasury uses the ACH extensively to pay certain obligations of the government.

Total increase in value over a certain period of time, expressed as a percentage of the initial value. It consists of income plus capital appreciation. The performance 1/3/5 years or since launch is the average annual performance over the last 12/36/60 months or since inception. The cumulative return is the total return since the initial investment. The return year-to-date (YTD) is the return from January 1st of the current year until today. The quarterly/monthly/annual returns are the total returns for every quarter/month/calendar year.

Total increase in value over a certain period of time, expressed as a percentage of the initial value. It consists of income plus capital appreciation. The performance 1/3/5 years or since launch is the average annual performance over the last 12/36/60 months or since inception. The cumulative return is the total return since the initial investment. The return year-to-date (YTD) is the return from January 1st of the current year until today. The quarterly/monthly/annual returns are the total returns for every quarter/month/calendar year.

The worst monthly return over the period observed.

Some funds offer various categories of shares. For some Clariden bond funds, investors can opt either for -A- shares, which pay an annual distribution of income, or -B- shares, where all income is immediately reinvested in the fund.

Stands for the French term ""Société d'Investissement à Capital Variable"" and is an open-end fund in the form of an investment company with variable capital. See 'OEIC' and 'ICVC'.