Author: ArtErnst

What is a long/short mutual fund? When you own shares of a stock, in the vernacular of Wall Street you are “long” that stock. If you sell stock that you do not own – stated otherwise, you owe stock to someone –…

What is a C-share mutual fund? A C-share mutual fund is a class of fund with continuous sales charges instead of high upfront or back-end fees. Like B-shares, those sales charges result in a very high expense ratio. Unlike B-shares, those extra…

What is a B-share mutual fund? B-share mutual funds have sales charges as high as A-shares, but they hit in a less obvious fashion. For years, reps faced resistance from prospective clients who objected to the immediate loss of money after purchasing…

What is an asset allocation fund? An asset allocation fund is a mutual fund with both stocks and bonds presented as a one-stop shopping solution to your portfolio management needs. While some such funds use the words “balanced” or “equity income” in…

What is an A-share mutual fund? An A-share mutual fund, also known as a front-end loaded mutual fund, incurs a sales charge at purchase. If the load is 6%, your investment of $10,000 will leave you $9,400 worth of shares at the…

What is an initial public offering (IPO)? An initial public offering (IPO) is the first public sale of a security. IPOs occur all the time in the debt markets as governments and large corporations who borrow money usually do so by issuing…

What is a loaded mutual fund? A loaded mutual fund is a mutual fund whose shares can only be acquired by paying sales charges. These charges might be collected up front at the time of purchase, later on upon sale, or daily…

What is a hedge fund? A hedge fund is a legal entity which invests money gathered from its partners or shareholders – usually large chunks from wealthy individuals and/or institutions. Casual observers often confuse hedge funds with mutual funds, thinking the former…

What is a future? A futures contract, often abbreviated as ‘future’, represents the purchase or sale of something with a future settlement date. When you buy a future, you own the item with all the opportunity for gain and risk of loss.…

What is a currency fund? A currency fund is a mutual fund consisting of foreign currencies and securities denominated in foreign currencies. The fund can hold actual money but more likely will invest in money market instruments and futures contracts. Why you…