INCEPTION DATE

The date a fund was first made available to investors.

INCOME

1) Payments of dividends, interest, and/or short term capital gains earned by securities held by a fund. Income dividends are paid after deducting operating expenses.
2) An investment objective of many fixed income funds. Capital appreciation is not a consideration for these funds.

INCOME FUND

A fund that invests primarily in fixed income securities and/or high-yielding stocks. In general, income funds seek to provide current income rather than growth of capital.

INDEX

Indicators used to provide a point of reference for evaluating a fund's performance. The most common indices for stock funds are the Dow Jones Industrial Average and the S&P 500 Index. For fixed-income funds it is the Lehman Brothers Aggregate Bond Index.

INDEX FUND

A fund that invests in a collection of securities intended to match that of a broad-based index (NOTE: It is not possible for investors to actually invest in the actual index, such as the S&P 500). In general, index funds seek the same or a slightly better return that the index they mirror. Index funds tend to charge low administrative expenses.

INDIVIDUAL RETIREMENT ACCOUNT (IRA)

A personal savings plan that offers tax advantages to save and invest for retirement. Contributions are often tax deductible in whole or in part, depending upon individual cirumstances, including compensation levels and participation in an employer sponsored qualified retirement plan. Income derived from investments in a traditional deductible or nondeductible IRA are tax deferred until withdrawn. Under certain circumstances, withdrawals from a Roth IRA are tax free. Tax penalties may apply to IRA distributions taken before age 59 1/2.

INFLATION RISK

The possibility that the value of assets or income will be eroded by inflation (the rising cost of goods and services). Inflation risk is often mentioned in relation to conservative fixed income funds. While these types of fixed income funds may minimize the possibility of losing principal, they expose an investor to inflation risk.

INSURED BOND

A guarantee on a municipal bond that interest and principal will be paid timely and in full. Insured bonds tend to carry a high credit rating but to pay a lower return than comparably rated uninsured bonds. The largest municipal bond insurers include: The Municipal Bond Investment Assurance Corp. (MBIA), Federal Guarantee Insurance Corp. (FGIC), and AMBAC Indemnity Corp. (AMBAC).

INTERMEDIATE INVESTMENT GRADE BOND FUND

A fund that invests primarily in investment grade fixed income securities with dollar-weighted average maturities of five to ten years.

INTERMEDIATE U.S. GOVERNMENT FUND

A fund that invests primarily in government guaranteed fixed income securities with a dollar-weighted average maturity of five to ten years.

INTERMEDIATE U.S. TREASURY FUND

A fund that invests primarily in U.S. Treasury bills, notes and bonds with a dollar-weighted average maturity of five to ten years.

INTERNATIONAL FUND

A fund that invests primarily in the securities of companies located outside of the United States. In general, international investing not only offers diversification and the potential for high returns, but also involves special risks, such as currency concerns, and rapidly changing political scenarios.

INVESTMENT COMPANY

An investment company invests the pooled funds of investors in securities appropriate for its stated investment objectives. For a fee, the investment company provides more diversification, liquidity, and professional management service than is normally available to individual investors.

Mutual funds, known as open-end investment companies, have portfolios that can grow or be reduced, based upon market conditions and investor investment/redemption patterns. Hence the name: they have limitless numbers of shares outstanding. Closed-end funds, also called unit investment trusts, have a fixed portfolio, and a pre-set number of shares outstanding.

INVESTMENT GRADE

High quality bonds that are rated Baa or higher by Moody's, or BBB or higher by Standard & Poor's. Investment grade bonds are considered safe, because the rating reflects the perceived financial stability of the issuer. Usually, however, the higher the bond's rating, the lower the interest it must pay to attract buyers.

INVESTMENT OBJECTIVE

A fund's investment goal. For example, a growth fund typically has an investment objective of providing long-term growth of capital.

INVESTMENT STYLE

A description of a fund's investment strategy. For example, a growth fund might have a growth oriented style, a value-oriented style, or a blend of the two. Fixed-income funds tend to be managed with either an interest-rate sensitive style or a credit-sensitive style.

IRA (Individual Retirement Account)

A personal savings plan that offers tax advantages to save and invest for retirement. Contributions are often tax deductible in whole or in part, depending upon individual cirumstances, including compensation levels and participation in an employer sponsored qualified retirement plan. Income derived from investments in a traditional deductible or nondeductible IRA are tax deferred until withdrawn. Under certain circumstances, withdrawals from a Roth IRA are tax free. Tax penalties may apply to IRA distributions taken before age 59 1/2.

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