MANAGEMENT FEE

The amount a fund pays to its investment adviser for its services. The average annual fee industry wide is about one half of one percent of fund assets. A fund's management fee must be listed in its prospectus.

MANAGER

The Firm that provides the fund with investment research and portfolio management services.

MANAGER TENURE

How long the portfolio manager has been responsible for a fund's management.

MARKET CAPITALIZATION

Also referred to as "market cap." Market capitalization is a measure of a corporation's value, calculated by multiplying the number of outstanding shares of common stock by the current market price per share. Market capitalization is usually grouped into four main categories: large-cap, mid-cap, small-cap, and micro-cap.

MARKET TIMING

Attempting to time the purchase and sale of securities to coincide with ideal market conditions. Mutual fund investors may switch from stock funds to bond funds to money market funds as the strength of the economy and interest rate directions change.

MATURITY DATE

The date on which the principal amount of a bond is to be paid in full.

MAXIMUM DEFERRED SALES CHARGE

The maximum deferred sales charge imposed on purchases as stated in the investment company's prospectus current as of the date of submission.

MAXIMUM SALES CHARGE

The maximum sales charge imposed on purchases as stated in the investment company's prospectus current as of the date of submission.

MICRO-CAPS

A subset of small-caps. Stocks of companies with a market capitalization of less that $50 million are "micro caps." Micro-caps tend to be new, relatively untested corporations that can offer greater growth potential than larger caps, but also entail greater risk.

MID-CAPS

Stocks of companies with a medium market capitalization, usually defined as between $500 million and $3-5 billion. 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).

MID-CAP FUND

A fund that invests primarily in the stocks of companies with a medium market capitalization (mid caps).

MINIMUM PURCHASE

The smallest investment amount a fund will accept to establish a new account. Most fund groups also impose a minimum for additional purchases to an existing account.

MONEY MARKET FUND

Money market funds seek to maintain a stable net asset value by investing in the short-term, high-grade securities sold in the money market. These are generally the safest, most stable securities available, including Treasury bills, certificates of deposit, and commercial paper. Money market funds limit the average maturity of their portfolio to 90 days or less. They seek to generate monthly income, and to maintain a stable $1.00 per share net asset value. Some money market funds offer checkwriting privileges. No fees are generally charged to purchase or redeem shares in a money market fund. Several different portfolio types are available: Taxable, taxable government securities, and national or state tax-free.

MORNINGSTAR

An independent mutual fund rating agency that tracks over 7,200 mutual funds. Of those, Morningstar publishes full-page research reports on 1,500. Morningstar's rating system calls for the awarding of between 1 (the lowest) and five (the highest) stars to a fund for its risk adjusted performance over a 3, 5, and 10-year period. Approximately 10% of the funds rated earn five stars. Star ratings are recalculated monthly.

MORTGAGE-BACKED SECURITY

A security that returns principal and interest monthly as payments are received on the underlying mortgages. They are made up of individual home mortgages guaranteed by the government agencies. The mortgages are packaged into pools by agencies such as:

• Government National Mortgage Assn. (GNMA)
• Federal National Mortgage Assn. (FNMA)
• Federal Home Loan Mortgage Corp. (FHLMC)

Unscheduled repayment of principal can shorten the maturity of the bonds. (See "Prepayment Risk.")

MUNICIPAL BOND

A bond issued by a municipality to finance schools, highways, hospitals, airports, bridges, water and sewer works, and other public projects.

MUTUAL FUND

An open-end investment company that combines the money of thousands of people and invests it in a variety of securities in an effort to achieve a specific objective over time. Mutual funds offer the benefits of portfolio diversification (which provides greater safety and reduced volatility), professional management, and stand ready to buy back its shares at the current net asset value. Every fund's prospectus details information on the fund's objectives, fees, the management company, and more

Securities and investment products are Not FDIC Insured, May Lose Value, and are Not Bank Guaranteed.

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