Glossary

Showing: Investments

A

Asset Allocation
The process of diversifying a portfolio of investments among various classes of assets.

B

Basis Point
A term used to express fees, expenses, or loads relating to investments. A basis point equals one one-hundredth of one percent, e.g., .01% equals 1 basis point.

Blackout period
A period of time when participants are not permitted to take loans, obtain distributions, or direct investments. A blackout period most commonly occurs during a conversion of plan's assets from one provider to another provider.

Bond Fund
A debt security issued by a government or corporation promising repayment of a specified amount, plus interest, by a stated date.

C

Conversion
The process of changing from one service provider to another.

F

Fiduciary
Any person (individual or corporation) who exercises discretionary authority orcontrol over the management or disposition of plan assets.

M

Mutual Fund
A single account designed to create a portfolio of individual investments that may help to reduce the risk of owning individual investments.

N

Net Asset Value (NAV)
The market value of one share of a mutual fund. A mutual fund must determine its NAV at least once each business day, usually at the close of business of the New York Stock Exchange. It is calculated by taking the value of all of the fund’s assets (closing market price for all securities plus cash and receivables), less expenses, and dividing by the number of outstanding shares.

Q

QDIA
Qualified Default Investment Alternative. The Pension Protection Act of 2006 (PPA) includes a provision which insulates plan fiduciaries from liability associated with an approved default investment option.

S

Self Directed Brokerage Account
Allows you to select from thousands of publicly traded mutual funds in addition to your Plans’ core investment options.

T

Trustee
The individual, group of individuals, bank, or trust company having fiduciary responsibility for holding plan assets. 

V

Valuation Date
Refers to a point in time in which an asset is assigned a dollar value. It is a term often used in reference to valuation of assets to be distributed upon occurrence of an event, or a periodic determination of worth for reporting purposes.