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Active Management: The trading of securities to take advantage of market opportunities as they occur, in contrast to passive management. 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 risk of loss in return for potentially above-average investment returns.

Aggressive Growth Fund: An investment fund that takes higher risk of loss in return for potentially higher returns or gains.

Alpha: The measure of a mutual fund's risk-adjusted return relative to a benchmark index. Generally expressed as either positive or negative, alpha represents the difference between the fund's actual return and its expected return based on the level of risk the manager has taken. (see Benchmark Index)

Amana: Arabic word that denotes honesty and possession of trust.

AMEX Major Market Index (XMI): An index that is an average of 20 Blue Chip Industrial Stocks.

Annual Report: A yearly report or record of an investment's (e.g., a mutual fund's or company's) financial position and operations.

Annual Rate of Return: The annual rate of gain or loss on an investment expressed as a percentage.

Appreciation: The increase in the value of an investment or asset over a period of time.

Asset: Anything with commercial or exchange value owned by a business, institution, or individual. Examples include cash, real estate, and investments.

Asset Allocation: A method of investing by which investors include a range of different investment classes — such as stocksbonds, and cash equivalents — in their portfolios. (See Diversification).

Asset Class: A group of securities or investments that have similar characteristics and behave similarly in the marketplace. Three common asset classes are equities (e.g., stocks), fixed income (e.g., bonds), and cash equivalents (e.g., money market funds).

Average Annual Total Return: The yearly average percentage increase or decrease in an investment's value that includes dividendsgains, and changes in share price.

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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. Also called a contingent deferred sales charge. Saturna's affiliated funds do not charge back-end loads.

Balanced Fund: A fund with an investment objective of both long-term growth and income, through investment in both stocks and bonds.

Barclay's Capital U.S. Aggregate Bond Index: A common index widely used to measure performance of U.S. bond funds.

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: A prolonged period in the stock market in which prices are generally falling that is characterized by pessimism and the mass selling of stocks. (See Bull Market)

Benchmark: An unmanaged group of securities whose performance is used as a standard to measure investment performance. Some well-known benchmarks are the Dow Jones Industrial Average and the S&P 500 Index. (See Market Index)

Beta: A ratio (often encountered as "beta coefficient") that expresses the volatility (risk) of a security or portfolio relative to the volatility of the overall market. A security with a volatility that very closely matches the overall market's volatility will have a beta of 1. A more volatile (higher risk) security will have a beta above 1, while a beta below 1 indicates greater stability (lower risk) relative to the market. (See Volatility)

Bond: A debt security that 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. Income funds generally invest in bonds.

Bond Fund: 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, Moody's Investors Service, and Fitch issue ratings for different bonds, ranging from AAA (highly unlikely to default) to D (in default).

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. The terms broker, broker/dealer, and dealer are sometimes used interchangeably.

Brokerage Window: A plan feature that permits participants to purchase investments that are not included among the plan's general menu of designated investment alternatives.

Bull Market: A prolonged period in the stock market in which prices are generally rising that is characterized by optimism and the mass purchase of stocks. (See Bear Market)

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Capitalization (Cap): The total market value of a company's outstanding equity.

Capital Appreciation Fund: An investment fund that seeks growth in share prices by investing primarily in stocks whose share prices are expected to rise.

Capital Gain: An increase in the value of an investment, calculated by the difference between the net purchase price and the net sale price, taking into account any cost basis adjustments. (See Capital Loss)

Capital Loss: The loss in the value of an investment, calculated by the difference between the purchase price and the net sale price, taking into account any cost basis adjustments. (See Capital Gain)

Capital Loss Carryforward: A tax-saving accounting tactic in which capital losses from one tax year are applied (or carried forward) to offset the tax liability of a profitable future year.

Capital Preservation: An investment goal or objective to keep the original investment amount (the principal) from decreasing in value.

Cash Equivalent: An investment that is short term, highly liquid, and has high credit quality.

Citigroup BIG Bond Index: "BIG" is an acronym for "broad investment grade." This benchmark index measures the overall performance of investment grade bonds (rated BBB-, Baa3, or higher), including #effmatTreasury, government agency, corporate, and mortgage-backed bonds with maturities of at least one year.

The Citigroup World BIG Bond Index is a multi-asset, multi-currency benchmark, which provides a broad-based measure of the global fixed income markets.

Citigroup Government/Corporate 1-3 Years Index: A benchmark index composed of corporate and government bonds with maturities in the range of one to three years.

Closed-end Fund: A mutual fund whose shares are publicly traded in the secondary securities market. Unlike traditional mutual funds, closed-end funds establish a finite number of shares whose value is determined through trade on the open market. (See Open-end fund)

Collective Investment Fund: Investments created by a bank or trust company for employee benefit plans, such as 401(k) plans, that pool the assets of retirement plans for investment purposes. They are governed by rules and regulations that apply to banks and trust companies instead of being registered with the SEC. These funds are also referred to as collective or commingled trusts.

Commission: Compensation paid to a broker or other salesperson for his or her role when investments are bought or sold.

Common Stock: An investment that represents a share of ownership in a corporation.

Company Stock Fund: A fund that invests primarily in employer securities that may also maintain a cash position for liquidity purposes.

Competing Funds: An investment fund identified by an investment manager of another fund that is subject to special rules relating to an investor's ability to buy and sell investments between the two funds. See Equity Wash Restriction.

Compounding: The cumulative effect that reinvesting an investment's earnings can have by generating additional earnings of their own.

Conservative: An investment approach that accepts lower rewards in return for potentially lower risks.

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.

Corporate Bond: A bond issued by a corporation, rather than by a government. The credit risk for a corporate bond is based on the re-payment ability of the company that issued the bond.

Cost Basis: Also known as Tax Basis, cost basis is the baseline dollar value used to compute the capital gain or loss on an investment for tax purposes. Typically, cost basis is the original purchase price plus any adjustments for dividends, distributions, stock splits, brokerage commissions, etc. However, a variety of other factors can affect cost basis, such as the accounting method used, or whether an investment was inherited.

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."

Current Yield: The current rate of return of an investment calculated by dividing its expected income payments by its current market price.

Custodian: A person or entity (e.g., bank, trust company, or other organization) responsible for holding financial assets. Example: A mutual fund custodian is an institution, such as a bank or trust company, responsible for the physical guardianship of a fund's security holdings. Although individual custodians may or may not have control of assets, institutional custodians have possession of the assets but no control over them.

Custody Credits: A waiver of fees by a fund's custodian. The Amana Mutual Funds Trust receives custody credits in lieu of custodial interest payments to the funds on their cash reserves. To maintain compliance with Islamic principles, the Amana Mutual Funds may not receive the interest payments that would normally be generated from cash holdings. The Amana Funds' custodian has therefore agreed to waive or reduce its usual custodial fees and pays no interest to the funds.

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Debt Ratio: The amount of a company's debt (liabilities) expressed as a percentage of its assets. Debt ratio is a critical component of Amana Funds' Islamic compliance screening process because only companies with debt less than 33% of assets are considered for investment.

Deflation: The opposite of inflation — a decline in the prices of goods and services.

Depreciation: A decrease in value typically expressed as (1) a non-cash accounting transaction that reduces the book value of an asset over time or (2) a decrease in the value of an investment or other asset.

Designated Investment Alternative: The investment options available within a retirement plan into which participants can direct the investment of their plan accounts.

Distribution Fees: Also called 12b-1 fees, the dollar amount collected as a percentage (usually between .25% and 1%) of a mutual fund's average net assets per year to cover operating expenses associated with sales, marketing, and advertising. (See 12b-1 Fees)

Diversification: The practice of investing in multiple asset classes and securities with different risk characteristics to reduce the risk of owning any single investment.

Dividend: Money paid to holders of shares of a company or investment fund, typically from profits. The amount is usually expressed on a per-share basis.

Dividend Yield: The amount of cash per share a company pays out yearly to its shareowner as a percentage of the current price per share. A company with a stock price of $25 per share paying a dividend of $1 per share each year would have a dividend yield of 4% (1 ÷ 25 = 0.04 x 100 = 4%).

Dollar-Cost Averaging: An investment technique by which investors buy a fixed dollar amount of a particular investment on a regular schedule. As prices decrease, the investor’s fixed amount buys them a higher number of shares; when prices go up, fewer shares are purchased.

Dow Jones Industrial Average (Dow or DJIA): A widely followed price-weighted index of 30 of the largest, most widely held U.S. stocks.

Dow Jones Moderate Portfolio Index: A benchmark index composed of global stocks and bonds, including government bonds, corporate bonds, mortgage-backed bonds, and Treasury Bills.

Duration: Duration estimates the amount of time it will take to recoup a bond's purchase cost from its interest and principal payments. It also helps to gauge how sensitive a bond's market value is to interest rate fluctuations. A higher duration means a longer time to recoup investment cost, a higher sensitivity to changes in interest rates, and therefore higher risk.

For further reading about bond duration and its influence on bond prices and risks, see From The Yardarm: How Long Is Your Bond? Bond basics you’ll need for the duration

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Early Redemption Penalty: To discourage the frequent trading of fund shares, the imposition of a fee on redeemed shares held less than a designated minimum amount of time.

Effective Duration and Modified Duration are measures of a fund’s sensitivity to changes in interest rates and the markets. A fund’s modified duration is a dollar-weighted average length of time until principal and interest payments must be paid. Longer maturities typically indicate greater sensitivity to interest rate changes than shorter maturities. Effective duration differs from modified duration in that it accounts for the optionality embedded in call options and other security specific covenants that can change expected cash flows as the result of the movement of interest rates. Longer durations tend to indicate greater sensitivity to interest rate changes than shorter durations. (See also Effective Maturity)

Effective Maturity is the average amount of time until receipt of all interest and principal payments due. When call options and other security-specific covenants can add uncertainty about the timing of payments, observed market prices may be used to determine the implied timing when calculating effective maturity. (See also Effective Duration and Modified Duration)

Emerging Market: Generally, economies that are in the process of growth and industrialization, such as in Africa, Asia, Eastern Europe, the Far East, Latin America, and the Middle East. These economies, while relatively undeveloped, may hold significant growth potential in the future. Investing in these economies may provide significant rewards, and significant risks. May also be called developing markets.

Emerging Market Fund: A fund that invests primarily in emerging market countries.

Employer Securities: Securities issued by an employer of employees covered by a retirement plan that may be used as a plan investment option.

Equity/Equities: A security or investment representing ownership in a corporation, unlike a bond, which represents a loan to a borrower. Often used interchangeably with "stock."

Equity Fund: A fund that invests primarily in equities.

Equity Wash Restriction: A provision in certain stable value or fixed income products under which transfers made from the stable value or fixed income product are required to be directed to an equity fund or other non-competing investment option of the plan for a stated period of time (usually 90 days) before those funds may be invested in any other plan-provided competing fixed income fund (such as a money market fund).

European Stoxx 50 Index: An index of European blue chip stock index representing the leading 50 supersector stocks from 12 eurozone countries.

Exchange Traded Fund (ETF): An investment company, such as a mutual fund, whose shares are traded throughout the day on stock exchanges at market-determined prices.

Exchange Traded Note (ETN): An unsecured, senior debt security that can be bought and sold on an exchange. It is different from an Exchange Traded Fund (ETF) in that it owns no securities or other assets. Rather, its performance is linked to a designated market indexasset class, commodity, currency, market sector, or other strategy. An ETN has amaturity date but makes no coupon payments, and its principal is not guaranteed. Its market value is affected by market supply and demand as well as the credit quality of its issuer, which is usually a bank.

Ex-date (ex-dividend date): Fund shares purchased on or after the ex-dividend date are not eligible to receive the distributions declared on the record date.

Expense Ratio: A measure of what it costs to operate an investment, expressed as a percentage of its assets or in basis points. These are costs the investor pays through a reduction in the investment's rate of return. (See Operating Expenses and Total Annual Operating Expenses)

Expenses: Operating costs paid from fund assets.

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Federal Deposit Insurance Corporation (FDIC): A federal agency that insures money on deposit in member banks and thrift institutions.

Financial Industry Regulatory Authority (FINRA): A self-regulatory organization for brokerage firms doing business in the United States. FINRA 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 fund or company, usually published in the annual report. The financial statements generally include a balance sheet, income statement, statement of cash flows, and other financial statements and disclosures.

Fixed Income Fund: A fund that invests primarily in bonds and other fixed-income securities, often to provide shareholders with current income.

Fixed Return Investment: An investment that provides a specific rate of return to the investor.

Fractional Share: A portion of a stock, mutual fund, cryptocurrency, or ETF that is less than one full share. They are often the result of splits, acquisitions, exchanges, or dividend reinvestment programs. Typically, fractional shares don’t trade on the open market, and the only way to sell fractional shares is through a major brokerage. Benefits of fractional shares include allowing investors to diversify their portfolio with smaller amounts of money.

Fraud: Deliberate, wrongful deception of another party for material or financial gain.

Front-end Load: A sales charge on mutual funds or annuities assessed at the time of purchase to cover selling costs. Saturna's affiliated funds do not charge front-end loads.

FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI): An index composed of the 30 largest companies, measured by full market capitalization, on the Bursa Malaysia (the Malaysian stock exchange).

Fund Family: A group or "complex" of mutual funds, each typically with its own investment objective and managed and distributed by the same company. A Fund Family also could refer to a group of collective investment funds or a group of separate accounts managed and distributed by the same company.

Fund of Funds: A mutual fund, collective investment fund, or other pooled investment that invests primarily in other mutual funds, collective investment funds, or pooled investments rather than investing directly in individual securities (such as stocks, bonds or money market securities).

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Gain: An increase in value.

Gharar: Arabic term for risk. Islamic principles prohibit excessive or unnecessary gharar.

Glide Path: The change over time in a target date fund's asset allocation mix to shift from a focus on growth to a focus on income.

Global Fund: A fund that invests primarily in securities anywhere in the world, including the United States.

Government Securities: Any debt obligation issued by a government or its agencies (e.g., Treasury Bills issued by the United States).

Growth Fund: A fund that invests primarily in the stocks of companies with above-average risk in return for potentially 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 and Income Fund: A fund that has a dual strategy of growth or capital appreciation and current income generation through dividends or interest payments.

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Halal: Arabic term used to reference anything that is permitted according to sharia, or Islamic law. (See Haram and Halal Investing)

Hang Seng Index: A free-float capitalization-weighted index of companies selected from the stock exchange of Hong Kong representing the Commerce and Industry, Finance, Utilities, and Properties sectors.

Hang Seng China Enterprises Index: A free-float capitalization-weighted index comprised of H-shares listed on the Hong Kong Stock Exchange and included in the Hang Seng Mainland Composite Index.

Haram: The Arabic term used to reference anything that is unacceptable or forbidden according to sharia, or Islamic law. (See Halal and Halal Investing)

Holding Period: The duration of time between an investor's purchase and sale of a security.

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Inception Date: The date that a fund began operations.

Income Fund: A fund that primarily seeks current income rather than capital appreciation.

Index (also Indices, plural): A benchmark against which to evaluate a fund's performance consisting of a portfolio of characteristically similar securities considered to be representative of a particular market segment (or the market as a whole). The most common indices for stock funds are the Dow Jones Industrial Average and the Standard & Poor's 500 Index. (See Benchmark Index and Market Index)

Index Fund: An investment fund that seeks to parallel the performance of a particular stock market or bond market index. Index funds are often referred to as passively managed investments.

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.

Information Ratio: Measures and compares the active return of an investment portfolio compared to a benchmark index relative to the volatility of the active return; it is calculated by dividing the difference in annualized geometric returns between the portfolio and benchmark over over the whole period, with the tracking error during the period.

Institutional Investor: An entity trading very large volumes of securities. Some examples of institutional investors include mutual funds, pension funds, investment banks, insurance companies, and brokerages.

Interest/Interest Rate: The fee charged by a lender to a borrower, usually expressed as an annual percentage of the principal. For example, someone investing in bonds will receive interest payments from the bond's issuer.

Interest Income: The money paid by a borrower to a lender, usually a percentage of the principal debt owed, generating a source of income for the lender. Islamic law forbids investment in securities that pay interest, such as bonds, and companies earning their income from interest.

Interest Rate Risk: The possibility that a bond's or bond fund's market value will decrease due to rising interest rates. When interest rates (and bond yields) go up, bond prices usually go down and vice versa.

International Fund: A fund that invests primarily in the securities of companies located, or with revenues derived from, outside of the United States.

Intrinsic Value: The actual (vs. market) value of a company as determined through various, non-standardized techniques of financial analysis. Intrinsic value may be higher or lower than current market value. Value investors seek to invest in companies whose intrinsic value is estimated to be higher than current market value.

Investment Adviser: A person or organization hired by an investment fund or an individual to give professional advice on investments and asset management practices.

Investment Company: A corporation or trust that invests pooled shareholder dollars in securities appropriate to the organization's objective. The most common type of investment company, commonly called a mutual fund, stands ready to buy back its shares at their current net asset value.

Investment Objective: The goal that an investment fund or investor seeks to achieve (e.g., growth or income).

Investment Return: The gain or loss on an investment over a certain period, expressed as a percentage. Income and capital gains or losses 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.

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Jakarta Stock Exchange Composite Index (JCI): A capitalization-weighted index of all stocks listed on the Indonesia Stock Exchange.

Jurisdiction: The authority to make and apply the law. Also, the territory within which this authority applies.

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Large Capitalization (Cap): A reference to either a large company stock or an investment fund that invests in the stocks of large companies.

Large Cap Fund: A fund that invests primarily in large cap stocks.

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.

Liability: A debt or financial obligation. (See also Debt Ratio)

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 "target date retirement" or "age-based" funds.

Lifestyle Fund: A fund that maintains 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: A leading mutual fund research and tracking firm. Lipper categorizes funds by objective and size, and then ranks fund performance within those categories.

Liquidity: The ease with which an investment can be converted into cash. If a security is very liquid, it can be bought or sold easily. If a security is not liquid, it may take additional time and/or a lower price to sell it.

Load: A sales charge assessed on certain investments to cover selling costs. A front-end load is charged at the time of purchase. A back-end load is charged at the time of sale or redemption. Saturna's affiliated funds do not charge loads.

Long-term Capital Gain: The realized appreciation of a capital asset held longer than 12 months. (See Capital Gain and compare with Short-Term Capital Gain)

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Management Fee: A fee or charge paid to an investment manager for its services.

Market Capitalization or Market Cap: The total market value of a company's outstanding securities, excluding current liabilities.

Market Index: A collection of securities systematically and deliberately assembled to mirror the attributes and overall performance of a market or market sector (Examples: Dow Jones Industrial AverageNYSE Composite IndexS&P 500 IndexNasdaq-100 Index).

Market Risk: The possibility that the value of an investment will fall because of a general decline in the financial markets.

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.

Micro Transactions: A series of small deposits (generally totaling less than $1) into a bank account that are used for verification when linking a bank account to another account, such as an investment account. The amounts of the small deposits are then confirmed by the accountholder/user in order to verify that the correct bank account information was received. 

Mid Capitalization (Cap): A reference to either a medium-sized company stock or an investment fund that invests in the stocks of medium-sized companies.

Mid-Cap Fund: A fund that invests primarily in mid-cap stocks.

Mid-Cap Stocks: Stocks of companies with a medium market capitalization. Mid caps are often considered to offer more growth potential than larger caps (but less than small caps) and less risk than small caps (but more than large caps).

Modified Duration: Modified duration is a measure of a fund’s sensitivity to changes in interest rates and the markets. Modified duration accounts for interest payments in addition to the length of time until principal payments must be paid. Longer durations tend to indicate greater sensitivity to interest rate changes than shorter durations. Call options and other security specific covenants may be used when calculating modified duration. (See also Effective Duration and Effective Maturity)

Money Market Fund: A mutual fund that invests in short-term, high-grade, fixed-income securities and seeks the highest level of income consistent with preservation of capital (i.e., maintaining a stable share price).

Morningstar: A leading mutual fund research and tracking firm. Morningstar categorizes funds by objective and size, and then ranks fund performance within those categories.

MSCI ACWI Ex-US Index: An index produced by Morgan Stanley Capital International (MSCI). It is a broad measure of equity market performance throughout the world that excludes US-based companies.

MSCI EAFE Index: An index known by an acronym for the Europe, Australasia, and Far East markets produced by Morgan Stanley Capital International (MSCI). Markets are represented in the index according to their approximate share of world market capitalization. The index is a widely used benchmark for managers of international stock fund portfolios.

MSCI Emerging Markets Index: A benchmark equity index from Morgan Stanley Capital International (MSCI) that measures the market performance of global emerging economies.

MSCI World Index: An index of major world stock markets, including the United States. The index is a widely used benchmark for managers of global stock fund portfolios.

Mutual Fund: An investment company registered with the SEC that buys a portfolio of securities selected by a professional investment adviser to meet a specified financial goal (investment objective). Mutual funds can have actively managed portfolios, where a professional investment adviser creates a unique mix of investments to meet a particular investment objective, or passively managed portfolios, in which the adviser seeks to parallel the performance of a selected benchmark or index. Shares of a portfolio may be purchased or redeemed at the fund's current Net Asset Value per share.

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NASDAQ: The National Association of Securities Dealers Automated Quotation, also called the "electronic stock market." The NASDAQ composite index measures the performance of more than 5,000 U.S. and non-U.S. companies traded "over the counter" through NASDAQ.

Net Asset Value (NAV): The offering and redemption price per share of a mutual fund, calculated by subtracting fund liabilities from fund assets and dividing by the total number of outstanding shares. A fund's NAV is calculated each business day based on the aggregate closing market values of the fund's portfolio of securities.

Net Realized Gain/Loss: The difference in value between the purchase and redemption prices of a redeemed mutual fund share. If the redemption price is higher than the purchase price, a gain is realized; whereas if the redemption price is lower than the purchase price, a loss is realized. Realized gains and losses must be reported to the IRS for tax purposes.

Net Unrealized Gain/Loss: The difference in value between the purchase price and current Net Asset Value per share of a mutual fund. Prior to redemption the corresponding gain or loss is unrealized and is therefore not subject to taxation.

New York Stock Exchange (NYSE): The oldest and largest stock exchange in the United States, founded in 1792.

Nisab: The Arabic term referring to the level of income needed to support one's family for a year. Muslims calculate their yearly charitable obligation (Zakah) as a percentage of their annual income above nisab. (See Zakah)

No-Load Fund: A mutual fund whose shares are sold without a sales commission and which does not charge a combined 12b-1 fee and service fee of more than 25 basis points or 0.25% per year.

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Open-end Fund: A mutual fund offering a continuous, unlimited number of shares, whose value is determined by the collective market value of fund's portfolio. (See Closed-end and Net Asset Value)

Operating Expenses: The expenses associated with running or operating an investment fund. Operating expenses may include custody fees, management fees, and transfer agent fees. (See Expense Ratio and Total Annual Operating Expenses)

Ordinary Income: Income from operations, specifically excluding capital gains.

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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 investment funds that are actively managed.

Pay date (payable date): This is the date a mutual fund makes distributions on each share you owned as of the record date.

Philippine Stock Exchange Index (PSEi): A capitalization-weighted index of stocks on the Philippine Stock Exchange, representing the industrial, properties, services, holding firms, financial, and mining and oil sectors.

Portfolio: A collection of investments such as stocks and bonds that are owned by an individual, organization, or investment fund.

Portfolio Manager: The individual, team, or firm who makes the investment decisions for an investment fund, including the selection of the individual investments.

Portfolio Turnover Rate: A measure of how frequently investments are bought and sold within an investment fund during a year. The portfolio turnover rate is usually expressed as a percentage of the total value of an investment fund.

Price-to-Earnings Ratio (P/E): The share price of a company's stock divided by its reported earnings per share. The P/E ratio is also referred to as the "multiple" of a company's earnings.

Price-to-Cash Flow Ratio (P/CF): The share price of a company's stock divided by its reported operating cash flow per share.

Price-to-Book Ratio (P/B): The share price of a company's stock divided by the reported value of the company's tangible assets per share. The P/B ratio is also referred to as the "price-equity" ratio.

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 certain investments, such as mutual funds, to prospective investors. The prospectus contains information required by the SEC, such as investment objectives and policies, risks, services, and fees.

Proxy: The limited power of attorney authorizing a designated party to act on a stockholder's behalf.

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Qualified Dividend: A category of dividend that, as a result of meeting certain eligibility criteria established by the Jobs and Growth Tax Relief Reconciliation Act of 2003, is taxed at the lower rate for capital gains rather than as dividend income.

Qualified Default Investment Alternative (QDIA): Participants in a qualified retirement plan (such as a 401(k) or 403(b) plan) who do not make an investment selection will have their retirement contributions directed into a QDIA unless they choose a different option. As defined by the Pension Protection Act (PPA) of 2006, a QDIA is a well-diversified fund or managed portfolio that is capable of meeting a retirement plan participant's long-term retirement savings needs, such as a balanced fundlifecycle fundtarget date fund, or professionally managed account.

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R-Squared: A statistical measure that explains the percentage of a fund's volatility that can be attributed to the volatility of its benchmark index. The R-squared statistic attempts to reveal what portion of a fund's risk is not unique to that fund, but rather is characteristic of the fund's overall market segment. (See Volatility and Benchmark Index)

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.

Real Rate of Return: The rate of return on an investment adjusted for inflation.

Realize: In the financial realm, generally the gain or loss through the sale of securities or redemption of shares can be described as "realized."

Rebalance: The process of moving money from one type of investment to another to maintain a desired asset allocation.

Record date: This date determines your eligibility to receive fund distributions. You only receive distributions on the fund shares you own as of the record date.

Redemption: The sale of fund shares back to the fund. Redemption can also be used to mean the repayment of a bond on or before the agreed upon pay-off date.

Redemption Fee: A fee, generally charged by a mutual fund, to discourage certain trading practices by investors, such as short-term or excessive trading. If a redemption fee is charged it is done when the investment is redeemed or sold.

REIT: The abbreviation for Real Estate Investment Trust. A REIT is a trust or company that holds income-producing real property (e.g., apartments, commercial retail centers, office complexes) and/or real estate financial instruments such as mortgages, construction loans, and mortgage-backed securities. The earnings generated by the REIT's holdings are distributed, or passed through, to shareowners.

Return: The gain or loss on an investment. A positive return indicates a gain, and a negative return indicates a loss.

Riba: Arabic term often equated to income from usury or interest, although its comprehensive meaning broadly refers to any monetary gain from an unequal trade. Riba is explicitly forbidden by the Quran.

Risk: The potential for investors to lose some or all the amounts invested or to fail to achieve their investment objectives.

Risk Tolerance: An investor's ability and willingness to lose some or all of an investment in exchange for greater potential returns.

Round Trip Restriction: A policy that limits the number of times an investor 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.

Russell Indexes (Indices): A group of indexes that are widely used to benchmark investment performance. The most common Russell index is the Russell 2000 Index, an index of U.S. small-cap stocks, which measures the performance of the 2,000 smallest U.S. companies in the Russell 3000 Index.

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S&P Global 1200 Index: A benchmark index composed of seven other regional and country indices that together measure 1200 equities from Canada, Latin America, Asia, Australia, and Europe.

S&P Idaho Municipal Bond Index: A benchmark index that measures the performance of bonds issued in the state of Idaho.

Sales Charge: A charge for buying an investment.

Sector Fund: A fund that invests in a particular or specialized segment of the marketplace, such as stocks of companies in the software, health care, or real estate 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. Any investment in which investors are entitled to profit through the efforts of another, such as a corporation, government, or organization.

Separate Account: An insurance company account that is segregated or separate from the insurance company's general assets. Also refers to a fund managed by an investment adviser for a single plan.

Share: A representation of ownership in a company or investment fund.

Share Class: Some investment 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 most investment funds, each class has different fees and expenses but all of the classes invest in the same pool of securities and share the same investment objectives.

Shareholder/Shareowner: An owner of shares in an investment fund or corporation.

Shareholder-Type Fees: Any fee charged against your investment for purchase and sale, other than the total annual operating expenses.

Sharia: Islamic law.

Sharpe Ratio: Developed by Nobel laureate William F. Sharpe, it helps investors evaluate a portfolio's return in terms of risk exposure. A higher Sharpe ratio indicates lower risk exposure relative to the return generated, while a lower ratio indicates relatively high risk exposure. The Sharpe ratio is calculated by subtracting the risk-free interest rate (e.g., that of US Treasury bills) from a portfolio's return, then dividing by the standard deviation of the portfolio's returns.

Short-term Capital Gain: The realized appreciation of a capital asset held 12 months or less. (See Capital Gain and Long-Term Capital Gain)

Small Capitalization (Cap): A reference to either a small company stock or an investment fund that invests in the stocks of small companies.

Small-Cap Fund: A fund that invests primarily in small-cap stocks.

Small-Cap Stocks: Stocks of companies with a smaller market capitalization. Small caps are often considered to offer more growth potential than large caps and mid caps but with more risk.

Stable Value Fund: An investment fund that seeks to preserve principal, provide consistent returns and liquidity. Stable value funds include collective investment funds sponsored by banks or trust companies or contracts issued by insurance companies.

Standard & Poor's 500 Stock Index (S&P 500): An index comprised of 500 widely held common stocks considered to be representative of the U.S. stock market in general. The S&P 500 is often used as a benchmark for equity fund performance.

Standard Deviation: The measure of how closely a set of data matches the mean (average) value of that data. The higher the standard deviation, the more spread out (or variable) the data points are. The lower the standard deviation, the more closely each data point matches the mean value of the group. Standard deviation can be used to measure the historical variability of a mutual fund's annual return.

Stock: A security that represents an ownership interest in a corporation.

Stock Exchange of Thailand Index (SET): A capitalization-weighted index of stocks traded on the Stock Exchange of Thailand.

Stock Fund: A fund that invests primarily in stocks.

Stock Symbol: A unique abbreviation used to identify a security for trading and tracking in financial markets. (Also see Ticker Symbol)

Sukuk: A negotiable, fixed-income instrument structured to provide income distributions in conformity with the prohibition of interest under Islamic principles. Sukuk make regular distributions of pass-through income, similar to a Real Estate Investment Trust (REIT), and are like REITs in that investors own proportional interest in the trust in which the assets are held.

Summary Prospectus: A short-form prospectus that a mutual fund generally may provide to investors if the fund's long-form prospectus and additional information are available online or on paper upon request.

Survivorship Bias: A concept in the mutual fund industry intended to describe the upward bias in aggregate fund statistics that occurs gradually over time as poorly performing funds are routinely closed or merged with better performing "survivors" and are therefore excluded from future performance calculations.

Systemic Risk: Risk that is common to an entire system or set of investment opportunities. Also known as market risk, systemic risk cannot be mitigated through diversification.

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Takaful: Arabic term referring to a collective arrangement among a group of individual parties whereby pooled donations serve to protect or indemnify the pool's participants against loss or damage, thus providing an alternative to traditional insurance that complies with Islamic principles.

Target Date 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 "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."

Tax Basis: See Cost Basis

Ticker Symbol: A unique abbreviation used to identify a security for trading and tracking in financial markets. (Also see Stock Symbol)

Time Horizon: The amount of time that an investor expects to hold an investment before taking money out.

Total Annual Operating Expenses: 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. (See Expense Ratio and Operating Expenses)

Tracking Error: A measure of the risk in an investment portfolio that is due to active management decisions made by the portfolio manager; it indicates how closely a portfolio follows the index to which it is benchmarked and is calculated as the annualized standard deviation of the differences in monthly returns between the portfolio and the benchmark.

Trustee: A person or entity (e.g., bank, trust company, or other organization) that is responsible for the holding and safekeeping of trust assets. A trustee may also have other duties such as investment management. A trustee that is a "directed trustee" is responsible for the safekeeping of trust assets but has no discretionary investment management duties or authority over the assets.

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Unit: A representation of ownership in an investment that does not issue shares. Most collective investment funds are divided into units instead of shares. (See Share)

Unitholder: An owner of units in an investment. (See Shareholder)

Unit Class: Investment funds that are divided into units (e.g., collective investment funds) instead of shares may offer more than one type or group of units, each of which is considered a class (e.g., "Class A"). For most investment funds, each class has different fees and expenses, but all of the classes invest in the same pool of securities and share the same investment objectives.

Unit Value: The dollar value of each unit on a given date.

Unrealized: A change in asset value (gain or loss) that has not been fulfilled by means of sale or redemption.

U.S. Treasury Securities: Debt securities issued by the United States government and secured by its full faith and credit. Treasury securities are the debt financing instruments of the United States Federal government, and they are often referred to simply as Treasurys.

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Value Fund: A fund that invests primarily in stocks that are believed to be priced below what they are really worth.

Value Investment Style: An investment strategy driven by the systematic identification and purchase of securities determined to be as yet undervalued in the current market. The profitability of the value investment style relies on the assumption that market forces act to eventually bring a security's market value in line with its intrinsic value. (See Intrinsic Value)

Variable Return Investment: Investments for which the return is not fixed. This term includes stock and bond funds as well as investments that seek to preserve principal but do not guarantee a particular return, e.g., money market funds and stable value funds.

Vesting schedule: A vesting schedule tells retirement plan participants the number of years of service necessary for them to earn non-forfeitable rights to 100% of employer contributions to their retirement accounts. For example, a graduated vesting schedule allows a plan participant to earn a higher percentage of ownership rights each year until fully vested with 100% rights. A cliff vesting schedule provides 0% ownership rights until a designated number of years of service is reached, at which time the participant is 100% vested. Employee contributions are always 100% vested.

Volatility: The amount and frequency of fluctuations 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 because there is an increased chance that the price of the security will have fallen when an investor wants to sell.

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Weighted Average: The calculated average of some given values in which certain values are assigned more influence (greater weight) over the outcome than the other values.

Wrap Fee: A fee or expense that is added to or "wrapped around" an investment to pay for one or more product features or services.

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Yield: The value of interest or dividend payments from an investment, usually stated as a percentage of the investment price. The rate of return on a security expressed as a percentage.

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Zakah: The Arabic term referring to the yearly amount that Muslims are obligated to pay to charitable causes, calculated as a percentage of annual income above basic living expenses or nisab. (See Nisab)

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12b-1 fee: The U.S. Securities and Exchange Commission adopted rule 12b-1 in 1980. The rule permits mutual funds to assess a fee on shareholder assets that is intended to help cover the fund's costs associated with marketing and selling the fund. 12b-1 fees may also be used to cover shareholder servicing expenses.