A Accrued Interest - Interest that has been earned but not yet credited to a bond or other fixed-income investment, such as a certificate of deposit. Active Management The use of professional investment managers to actively manage an investment portfolio by defining investment objectives and making decisions about which investments to purchase, hold, and/or sell with the goal of exceeding returns of related market indices. Administrative Expenses - Fees that may be charged to participant accounts for legal, accounting, administration, and recordkeeping services associated with a plan. Annual Operating Expenses - The annual fees associated with investing in a mutual fund or other similar-type investment, including but not limited to investment management, recordkeeping, legal, accounting, and auditing. The annual fee, also referred to as operating expenses, may include compensation paid to third-parties for distribution of the investment option or other services. Annuity - An insurance contract that provides for a series of substantially equal payments over an individual s lifetime or other specified period of time. Aggressive Growth Fund - A mutual fund or other similar-type investment designed to achieve maximum growth with less emphasis placed on related risk and market volatility. Appreciation - An increase in the value of an investment over time. Asset - Any tangible or intangible resource with monetary value (e.g., cash, real estate, investments in stocks, bonds, or mutual funds). Asset Allocation - Diversification amongst multiple asset classes to achieve an acceptable balance between risk and return. Asset Allocation Model - A pre-determined asset allocation strategy designed to achieve specific investor goals based on risktolerance or other defined objectives. Asset Class - Classification used to describe a group of investments with similar characteristics, such as equities (stocks), fixedincome investments (bonds), and cash/cash equivalents (money market funds). Average Annual Total Return - A percentage used to report historical investment performance of a mutual fund or other similartype investment. The average annual total return is reported net of the annual operating expenses associated with the investment. B Back-End Load - A fee that may be charged in connection with selling a mutual fund or other similar-type investment. This type of fee, also referred to as a contingent deferred sales charge or redemption fee, typically decreases over time and is disclosed in the investment materials, if applicable. Balanced Fund - A mutual fund or other similar-type investment that strives to maintain an equal balance between fixed-income and equity investments. Basis Point A measurement unit used to express annual operating expenses or investment returns. One basis point is equal to.01%. Bear Market - A falling market. Benchmark - A measurement tool used to compare performance of a mutual fund or similar-type investment against a broad-based market index. Beta A measurement unit used to express market volatility. A beta of 1 indicates the price of the investment will increase/decrease in correlation with the overall market. A beta of more than 1 indicates the investment is subject to greater price fluctuations than the market as a whole. A beta of less than 1 indicates the price of the investment will fluctuate less than the overall market. Blended Fund - A mutual fund or other similar-type investment comprised primarily of a blend of growth and value equities. Bond A promissory note issued by a company or a governmental entity to raise funds. Bonds typically provide for periodic interest payments at a specific rate and a return of principal, or the original investment, on a given date. Bond Fund - A mutual fund or other similar-type investment comprised primarily of bonds or other debt instruments. Brokerage Window An optional feature that allows participants to open a self-directed brokerage account within an employersponsored retirement plan. Whether or not this feature is available depends on the specific provisions of the plan. Bull Market - A rising market. Rev. 02/2012 Page 1 of 7
C Capital Appreciation The increase in value (share price) of an investment over time resulting from sustained corporate growth. Capital Appreciation Fund - A mutual fund or other similar-type investment comprised primarily of growth stocks. Capital Gain Distribution Payments made by a mutual fund to investors for capital gains realized from the sale of underlying investments. In a retirement plan, these payments are credited to participant accounts as earnings. Cash Equivalents Cash-like investments including certificates of deposit, money market funds, and U.S. Government Treasury bills. Certificates of Deposit (CDs) A bank instrument that provides for payment of interest at a stated rate for a specified time period. Collective Investment Fund An investment pool offered by a bank or trust company that operates much like a mutual fund. Commission Compensation paid to an individual or entity (broker) in connection with the purchase and/or sale of investments. Common Stock An investment representing an ownership interest in a corporation. Common stocks are often underlying investments in mutual funds and other similar-type investment vehicles. Conservative Growth Fund - A mutual fund or other similar-type investment with the primary objective of achieving long-term growth while minimizing risk. Contingent Deferred Sales Charge A fee that may be charged in connection with selling a mutual fund or other similar-type investment. This type of fee, also referred to as a back-end load or redemption fee, typically decreases over time and is disclosed in the investment materials, if applicable. Current Income Fund - A mutual fund or other similar-type investment with the primary objective of providing investment returns through interest and dividend payments, rather than through an increase in the value of the underlying investments over time. D Depreciation A decrease in the value of an investment over time. Designated Investment Alternatives The investment alternatives designated by the plan into which participants and beneficiaries may direct the investments of assets held in, or contributed to, their accounts. Designated Investment Manager The individual or company designated to act in a fiduciary capacity with respect to investment management under the plan. Diversification The technique of selecting different investment types (stocks, bonds, mutual fund classes, etc.) to reduce overall market risk. Dividend Payments made to shareholders by a corporation in connection with an investment in stock. Dollar-Cost Averaging The technique of spreading investment purchases over time on a regularly-scheduled basis to lower the risk associated with making a purchase at any given point in time (e.g., buying at the highest price). This technique typically results in a lower average purchase price overall. E Employer Securities An optional feature that may allow participants to invest in the securities of their employer within their retirement plan. Equities Represents an ownership interest in a company (e.g., stocks). Equity Fund A mutual fund or other similar-type investment comprised primarily of stocks. Equity Income Fund A mutual fund or other similar-type investment with the objective of securing returns through a combination of investments in well-established companies that pay dividends and companies with projected moderate growth (e.g., stock appreciation). Equity Wash - A provision of a stable value product whereby direct transfers between certain competing funds must be directed to an equity fund or other non-competing fund option of the plan for a stated period of time (usually 90 days) before such transferred fund may be directed to any other plan-provided competing fixed income fund. Rev. 02/2012 Page 2 of 7
Exchange Fee A fee that may be imposed by certain investment providers when an investor transfers monies from one fund to another within the same fund family. This type of fee is disclosed in the investment materials, if applicable. Exchange-Traded Fund (ETF) A passively managed investment pool similar to a mutual fund that trades on the stock exchange like an individual stock. In other words, the price fluctuates throughout the day unlike traditional mutual funds where the NAV or price is calculated at the close of each business day. ETFs mirror a market index, such as the Standard &Poor s 500, and generally have lower annual expense ratios since they do not employ active management. Expense Ratio The annual operating expenses of a fund expressed as a percentage. See Annual Operating Expenses. F Face Value The value of a bond if held until maturity. Prior to maturity, the value of a bond may be higher or lower than the face value depending upon the interest rate and other market factors. Fixed-income Contracts An investment issued by an insurance company or bank that provides for a set interest rate over a specified period of time. The issuer bears the risk associated with the underlying investments. These types of arrangements are also often referred to as guaranteed investment contracts. Fixed-Income Securities Investments that provide for payment of fixed interest over a specified period of time (e.g., bonds). Front-End Load - A sales-charge that may be associated with the purchase of a mutual fund or other similar-type investment. This type of fee, also referred to as a load, directly reduces the amount available to purchase shares and is disclosed in the investment materials, if applicable. G Glide Path A strategy typically employed by target-date funds and other similar-type investment vehicles to gradually reduce risk over time by moving to a more conservative investment line-up as the investor nears a specific date in time (normally, retirement date). Global Fund - A mutual fund or other similar-type investment comprised primarily of international stocks. This type of fund may also include the stock of U.S. companies. Growth and Income Fund - A mutual fund or other similar-type investment with the objective of generating investment returns through a combination of investments targeted to produce capital appreciation and investments that produce dividends and/or interest. Growth Fund - A mutual fund or other similar-type investment comprised primarily of stocks from companies who are expected to experience growth and earnings at rates greater than the economy as a whole. Growth Stock The stock of a company that is expected to experience high growth in the future. The stock of these companies differs from well-established companies in that investment returns are expected to be realized through appreciation in the value of the company s stock as opposed to payment of dividends by the company. Guaranteed Investment Contract (GIC) - An investment issued by an insurance company or bank that provides for a set interest rate over a specified period of time. The issuer bears the risk associated with the underlying investments. These types of arrangements are also often referred to as fixed-income contracts. H I Income Fund- A mutual fund or other similar-type investment with the objective of generating investment returns through investments in securities that produce dividends and/or interest. Index A statistical measurement tool, as referred to as a market index, used to measure performance of a segment of the securities market (e.g., Standard & Poor s 500). Index Fund - A mutual fund or other similar-type investment with the objective of achieving approximately the same investment returns as a specific market index by including investments that mirror the components of the index. Rev. 02/2012 Page 3 of 7
Individual Expenses Fees that are generally charged directly to a participant s account in connection with actions taken by the participant, such as plan distributions or loans. Inflation The general increase in the price of products and services over time. Inflation Risk The risk that investment growth will not keep up with the general rate of inflation. International Fund - A mutual fund or other similar-type investment comprised primarily of foreign stocks. Interest The cost associated with borrowing money. Investment Advisor The individual or company charged with providing investment advice for plan fiduciaries and/or plan participants. J Junk Bond A bond that typically pays a higher rate of interest due to the increased risk of default reflected by a poor credit rating. K L Large-Cap Fund - A mutual fund or other similar-type investment comprised primarily of investments in large company stocks measured by relative market capitalization. Lifecycle Fund - A mutual fund or other similar-type investment with the objective of gradually reducing risk over time by moving to a more conservative investment line-up as the investor nears a specific date in time (normally, retirement date). These investment vehicles are also referred to as target-date funds. Liquidation The process of converting securities into cash. Liquidity A measurement of how quickly an investment can be converted into cash. Load - A sales charge that may be associated with the purchase of a mutual fund or other similar-type investment. This type of fee, also referred to as a front-end load, directly reduces the amount available to purchase shares and is disclosed in the investment materials, if applicable. M Managed Account An investment account actively managed by a professional investment manager that may be comprised of stocks, bonds, mutual funds or other investments, or any combination therein. Management Fee The advisory fee associated with management of a mutual fund or other similar-type investment or a managed account. Market Capitalization The market value of a company s stock (stock price multiplied by number of outstanding shares). Market capitalization is used to measure the size of a company. Market Index A statistical measurement tool, as referred to as an index, used to measure performance of a segment of the securities market (e.g., Standard & Poor s 500). Market Timing The attempt to buy shares at their low point and sell shares at their high point. Market Volatility The fluctuation in share value relative to the overall market. Maturity Date The date that a loan or bond must be repaid in full. Mid-Cap Fund - A mutual fund or other similar-type investment comprised primarily of investments in mid-sized company stocks measured by relative market capitalization. Money Market Fund An investment vehicle with the objective of achieving investment results through interest payments by investing in cash or cash equivalents. Mortgage Bond A bond backed by real estate. Rev. 02/2012 Page 4 of 7
Municipal Bond A bond issued by a municipality or state agency. Mutual Fund An investment vehicle that allows individual investors to diversify their holdings amongst multiple investments (stocks, bonds, and cash/cash equivalents) based on a specific investment strategy or objective by pooling the monies of the individual investors. N Net Asset Value (NAV) The price of a share or unit of a mutual fund or similar-type investment traded in the open market. NAVs for mutual funds are typically calculated as of the close of each business day. O Operating Expenses - The annual fees associated with investing in a mutual fund or other similar-type investment, including but not limited to investment management, recordkeeping, legal, accounting, and auditing. The annual fee, also referred to as annual operating expenses, may include compensation paid to third-parties for distribution of the investment option or other services. P Par Value The face value of a bond. Passive Management - The use of a market index to determine holdings within a mutual fund or similar-type investment with the objective of mirroring investment results for that given index. Preferred Stock - An investment representing an ownership interest in a corporation. Shareholders of preferred stock are typically entitled to certain rights or benefits beyond those provided to common shareholders. For example, a company might pay dividends to preferred shareholders but not to common shareholders. Portfolio A group of investments (e.g., stocks, bonds, cash and mutual funds) held by an investor or entity. Portfolio Turnover The relative length of time and frequency with which investments are purchased and sold within a portfolio during a given year. Present Value The current value of a future revenue stream, discounted by an interest rate factor. Prime Rate An interest rate charged by banks that is tied to the federal funds rate set by the Federal Reserve. This rate is often used as a basis for the interest rate for loans (e.g., prime plus 2%). Principal The original cost of an investment. Prospectus A document that discloses important investor information regarding a mutual fund, such as objectives, current holdings, and related fees and expenses. There are strict regulatory requirements regarding the information that must be included within a prospectus by the mutual fund provider. Put Option The right to sell a stock during a specific time period for a specific price. Q R Rate of Return The investment return (gain or loss) for a specific investment, portfolio of investments, or investment vehicle stated as a percentage for a given period of time. Real Estate Investment Trust (REIT) An investment vehicle similar to a mutual fund but primarily comprised of real estate holdings and investments. Rebalance Periodic realignment of the holdings within an investment account to meet a specific asset allocation strategy. Redemption To liquidate a mutual fund or similar-type investment or to receive a return of principal from a bond. Rev. 02/2012 Page 5 of 7
Redemption Fee - A fee that may be charged in connection with selling a mutual fund or other similar-type investment. This type of fee, also referred to as a back-end load or contingent deferred sales charge, typically decreases over time and is disclosed in the investment materials, if applicable. Return - The gain or loss for a specific investment, portfolio of investments, or investment vehicle for a given period of time. Risk In the context of investing, risk means the possibility that an investment or portfolio of investments will not achieve the desired rate of return over a given period of time. Many factors affect risk, such as overall economic conditions, market segment conditions, and individual security volatility. Risk Tolerance An individual investor s ability to accept market fluctuations to achieve long-term investment return objectives. Russell 1000 Index - A broad-based composite index including 1,000 U.S. large-company stocks frequently used as a standard to measure large-cap market performance. S Sales Charge A commission or fee paid to an advisor in connection with the purchase or sale of a mutual fund. Sales charges vary by fund and fund class and are disclosed in the investment materials, if applicable. Shareholder An individual or entity who owns stock of a corporation. Shareholder-Type Fees Any fees changed to a participant s account in connection with the purchase or sale of an investment option that are not included in the annual operating expenses of the fund. Securities Assets made available to investors like stocks, bonds, and mutual funds. Serial Bond A bond that provides for a return of principal at periodic intervals rather than on a single maturity date. Small-Cap Fund - A mutual fund or other similar-type investment comprised primarily of investments in small company stocks measured by relative market capitalization. Stable Value Fund - A mutual fund or other similar-type investment with the primary objective of providing investment returns through interest payments while preserving principal. Standard & Poor s 500 Index (S&P 500) A broad-based composite index including 500 U.S. large-company stocks frequently used as a standard to measure large-cap market performance. Stock Unit of ownership in a corporation. Stock Dividend A dividend paid to shareholders of a corporation in the form of additional shares of stock. Stock Split A division of shares of a corporation resulting in an increase in the number of outstanding shares. For example, under a 2-for-1 stock split, each shareholder would receive an additional share. Immediately after the split, the value of each share would be half of what it was prior to the split. T Target-Date Fund - A mutual fund or other similar-type investment with the objective of gradually reducing risk over time by moving to a more conservative investment line-up as the investor nears a specific date in time (normally, retirement date). These investment vehicles are also referred to as lifecycle funds. Ticker Symbol A unique symbol used to trade shares of stocks in open market exchanges. For example, the ticker symbol for the Coca-Cola Bottling Co. is COKE. Time Horizon The amount of time an individual investor anticipates being invested in the market to achieve specific investment return objectives. In other words, the amount of time the monies can be invested subject to risk before the individual will require use of the funds. Treasury Bill Debt security issued by the U.S. government with a maturity date of one year or less. Treasury Bond - Debt security issued by the U.S. government with a maturity date of more than seven years. Treasury Note - Debt security issued by the U.S. government with a maturity date from one to seven years. Turnover Ratio The percentage the underlying investments held in a mutual fund, similar-type investment, or other investment portfolio turnover during a year. In other words, the relative length of time and frequency that investments are purchased and sold within an investment vehicle during a given year. Rev. 02/2012 Page 6 of 7
12b-1 Fee - A fee included as part of the annual operating expenses of a mutual fund used to compensate financial advisors or other intermediaries for marketing/distributing the investment. U U.S. Government Agency Securities Bonds issued by U.S. government agencies (other than the U.S. Treasury Department) such as the Federal National Mortgage Association (Fannie Mae). V Value Fund - A mutual fund or other similar-type investment with the objective of achieving investment returns by investing in stocks of companies that are perceived to be undervalued in the market and are expected to recover market value. In other words, stocks that are expected to increase in value. Voting Right A shareholder s right to vote related to corporate actions. W Wilshire 5000 Equity Index A broad-based stock market index including over 5,000 company stocks. World Fund - A mutual fund or other similar-type investment comprised primarily of international stocks, including stocks of U.S. companies. X Y Z Zero Coupon Bond A type of bond that does not pay interest. This type of bond is purchased at a discount and investment returns are achieved by a return of the proceeds representing the face value of the bond at maturity. Rev. 02/2012 Page 7 of 7