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Offering price. See Public Offering Price
Open-end fund (mutual fund). An investment company that sells shares to the public. The firm continually creates new shares on demand.
Ordinary dividend. A fund distribution comprised of net investment income and net short-term capital gains.
Over-the-counter market (OTC). Market in which securities transactions are conducted through a telephone and computer network connecting dealers in stocks and bonds, rather than on the floor of an exchange. OTC stocks are traditionally those of smaller companies that do not meet the listing requirements of the New York Stock Exchange, though in recent years many companies that qualify for listing have chosen to remain with OTC trading.
Portfolio. Combined total of securities owned by an individual or a mutual fund.
Preferred stock. Class of capital stock that pays dividends at a specified rate. It has preference over common stock in the payment of dividends and the liquidation of assets, but does not ordinarily carry voting rights.
Privatisation. Act of converting a publicly operated enterprise into a privately owned and operated entity. Shares formerly owned by the government, as well as management control, are sold to the public. The theory behind privatization is that these enterprises run more effectively and offer better service.
Public offering price (POP). Price at which mutual fund shares are offered for sale to the public. The public offering price represents the NAV plus any applicable initial sales charges. Also known as Initial Public Offer (IPO) price.
Real yield. A bond's yield, adjusted for inflation. In other words, if the rate of inflation was 3% and a bond was yielding 10%, the real yield would be 7%. See also, Standarized yield.
Record date. Date on which a shareholder must officially own shares in order to be entitled to a dividend. After the record date, shares are sold ex-dividend, or without the dividend.
Regional mutual funds. Funds that limit their investments primarily to a specific country or geographic region, such as California, Europe, Japan, or Latin America. Regional mutual funds tend to be more volatile than funds with more geographically diverse holdings.
Regular savings plan. A plan in which an investor can automatically accumulate shares of a fund on a regular basis.
REIT (Real Estate Investment Trust). A company, usually traded publicly, that manages a portfolio of real estate to earn profits for shareholders.
Return of capital distribution. A distribution in excess of a fund's current and accumulated earnings and profits. A return of capital distribution is generally a nontaxable distribution that reduces a shareholder's cost basis in shares of a fund.
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