Fund Performance

Glossary of terms

A

1 YR, 3 YR, 5YR, 10 YR:
On the Fund Performance Summary, the fund returns for the last 12, 36, 60 and 120 consecutive calendar months.
Annuity:
Contract usually issued by an insurance company that pro­ vides income for a specified period of time or for life.
Asset Allocation:
The process of dividing investments among different kinds of assets , such as stocks , bonds , real estate and cash, to optimize the risk/reward tradeoff based on an individual's specific situation and goals .

B

Benchmark Last Month, Last Quarter, YTD, etc.:
A tool to determine comparable fund performance as of the last calendar month, quarter, year to date, or other specified time frame.
Bonds:
A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. Generally, a bond is a promise to repay the principal along with interest ( coupons ) on a specified date (maturity). Some bonds do not pay interest, but all bonds require a repayment of principal. When an investor buys a bond, he/she becomes a creditor of the issuer. However, the buyer does not gain any kind of ownership rights to the issuer, like the buy of a stock. Bond and/or Fixed Income mutual funds invest in bond instruments.

C

Contribution Limits:
The maximum amount of money you can contribute to a retirement program. Generally set by the IRS, but can be defined further by your employer.

D

Diversification:
The process of allocating investments over a variety of asset classes with the aim of "spreading the risk" and offsetting potential market volatility.
Dividend:
A payment declared by a company's board of directors and given to its shareholders out of the company's current or retained earnings , usually quarterly. Dividends are usually given as cash ( cash dividend ), but they can also take the form of stock ( stock dividend ) or other property. Dividends provide an incentive to own stock in stable companies even if they are not experiencing much growth. Mutual fund dividends are generally reinvested into the fund, and not received in cash.

E

Expense Ratio:
The amount that investors pay for management of a mutual fund or variable annuity. The amount is expressed as a percentage of the fund or account's average net assets.

F

Fact Sheet Link:
On the Fund Performance Summary, a link provided to a quick but comprehensive view of a fund’s comparative performance against its peers.
Fixed Annuity:
Insurance contract guaranteeing the annuitant a speci­ fied monthly amount, even if the insured outlives his or her life expectancy.
Fixed Income:
An asset class that includes bonds - securities that are designed to pay a rate of interest over a set time period and then return the investor's principal.
Front End Fee or Front Load:
Sales charge assessed at the time of initial investment.
Fund Name:
The name of an actual fund product.

G

Gross Expense Ratio
The gross measure of what it costs an investment company to operate a mutual fund.  The ratio is determined through an annual calculation, where a fund’s operating expenses are divided by the average dollar value of its assets under management.
Guaranteed Fund
An investment offering that protects an individual's principal investment and provides a guaranteed minimum interest rate.

I

Inception
On the Fund Performance Summary, the fund returns since the creation of the fund product.
Inception Date
On the Fund Performance Summary, the date the fund product was first created.
Index:
A representation or “benchmark” that serve as a barometer for a given market or industry against which financial or economic performance is measured.
Indexing:
An investment strategy of a mutual fund or individual portfolio that seeks to match, rather than outperform the return and risk characteristics of a specific Index benchmark by holding all securities that make up an index (or a statistically representative sample of the index).
Investment (Inv.) Category:
A method to identify a fund’s investment goals based on actual investment styles as measured by their underlying portfolio holdings.

L

Last Month:
On the Fund Performance Summary, the fund returns as of the last calendar month.
Last Quarter:
On the Fund Performance Summary, the last calendar quarter returns.
Life Annuity:
Monthly payments for the life of the annuitant, regard­less of how long he or she lives.
Lifecycle Fund:
A professionally managed mutual fund that provides automatic asset allocation based on a target retirement date.

M

Money Market:
short-term debt securities , such as Treasury Bills with a maturity of one year or less and often 30 days or less. Money market securities are generally very safe investments which protect the value of your investment and return a relatively low interest rate.
Mortality and Expense Charge:
A variable annuity fee included in certain annuity or insurance products which serves to compensate the insurance company for the various risks it assumes under the annuity contract.
Mutual Fund:
A type of investment in which the money of many investors is pooled together to buy a portfolio of different securities. The fund is managed by professional(s) who invest in stocks, bonds, options, money market instruments or other securities.

N

Net Expense Ratio:
The net expense ratio reflects the gross expense ratio of a fund minus any possible rebates that fund may offer.
No-Load Mutual Funds:
Mutual fund whose shares are purchased directly from the fund without a sales charge.

P

Portfolio:
A collection of investments all owned by the same individual or organization . These investments often include stocks , which are investments in individual businesses; bonds , which are investments in debt that are designed to earn interest ; and mutual funds , which are essentially pools of money from many investors that are invested by professionals or according to indices .
Prospectus:
The legal document offering securities or mutual fund shares for sale, required by the Securities Act of 1933 . It must explain the offer , including the terms , issuer , objectives (if mutual fund ) or planned use of the money (if securities), historical financial statements , and other information to help an individual decide whether the investment is appropriate for him/her.
Provider:
One of the six companies authorized by the University of Texas System to receive and invest your contributions.

R

Redemption Fee:
A charge paid when an individual sells an investment, such as a mutual fund or an annuity.
Rollover:
A method of moving money in a retirement account from one tax- deferred account to another. Commonly used when an employee changes jobs and wishes to move their retirement accounts to their new employer, while maintaining tax-deferred status.

S

Summary Date:
On the Fund Performance Summary, the date the summary was last updated
Surrender or Withdrawal Charge:
Sales charges at the time of disbursement. Rates are usually calculated on a declining scale based on the duration of investment.

T

Ticker Symbol:
A symbol used to uniquely identify publicly traded shares of a corporation on a particular stock market.
Total Return:
The return on an investment , including income from dividends and interest, as well as appreciation or depreciation in the price of the security, over a given time period.

V

Variable Annuity:
A contract that provides future payments, usually at retirement. Future payments depend on the performance of the portfolio's securities.
Volatility:
The relative rate at which the price of a security moves up and down. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.

Y

YTD (Year-to-Date):
On the Fund Performance Summary, the fund returns from January to the current month of the current calendar year.

 

 

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