| Actively Managed Funds: |
A fund in which the fund manager chooses investments that he/she believes will outperform the overall market.
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| Annual Return: |
The rate of return that a fund earned over a specific 12-month period.
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| Annualized Return: |
The rate of return for a period greater than 1-year converted to a yearly rate. For example, a fund with an annualized 3-year return of 10%
has grown by the same amount as a fund that experienced an annual return of exactly 10% in each of the past 3 years.
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| Annuity: |
A series of periodic payments, usually level in amount or adjusted according to some index, that will continue for the lifetime of the recipient.
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| Asia/Pacific Rim Equity Fund: |
A fund that invests primarily in the common shares of companies located in Asia, Australia, and New Zealand.
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| Asset Allocation Fund: |
A fund that invests in a diverse range of asset classes, investor styles and fund managers with the goal of maximizing expected return while minimizing volatility for each investor profile.
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| Asset Class: |
A type of investment such as stocks, bonds, and treasury bills.
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| Asset Mix: |
The amount of each investment type (e.g. bonds, stocks) that is included in a portfolio.
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| Beneficiary Designation: |
A written declaration by a plan member specifying the person or persons who are to receive the proceeds from the plan in the event of the member's death.
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| Blend Investing Style: |
An investing style that combines value and growth styles.
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| Book Value: |
The original price paid to purchase an investment, plus reinvested income earned.
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| Bond: |
A bond is a promise made by a government or corporation to repay a loan, with interest, at a specified date in the future. By investing in a bond,
you loan money to the government or corporation in exchange for future repayment of the original amount plus interest.
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| Bottom Up: |
An investing style that looks for attractive companies regardless of what industry they are in.
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| Canadian Balanced Fund: |
A fund that invests in a combination of primarily Canadian common and preferred stocks, bonds and short-term securities. The goal of a typical balanced fund is to provide a balance between capital preservation and growth while mitigating risk.
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| Canadian Bond Fund: |
A fund that invests in Canadian fixed income securities that pay interest rates, such as corporate and government bonds. This interest rate is more commonly referred to a 'coupon rate' and is expressed as a percentage.
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| Canadian Equity Fund: |
A fund that invests primarily in common shares of Canadian companies. While the fund may hold stock of small companies,
the fund primarily invests in medium to large companies as represented by the Toronto Stock Exchange 300 Index.
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| Canadian Large Cap Equity Fund: |
A fund that invests primarily in shares of companies that are incorporated in Canada. While the fund may hold some shares of small companies, it primarily invests in medium to large companies that are listed on Canadian stock exchanges.
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| Canadian Money Market Fund: |
A fund that invests in short-term government securities.
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| Compound Interest: |
Interest paid on both the original investment, as well as on the interest the investment accumulates.
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| Canadian Small to Mid-Cap Equity Fund: |
A fund that invests primarily in shares of small and medium companies that are incorporated in Canada.
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| Consumer Price Index (CPI): |
This is an indicator that measures inflation which is the change in the cost of a fixed basket of products and services such as housing, electricity, food, and transportation.
An increase in the CPI signals an increase in the overall "cost of living".
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| Diversification: |
Building a portfolio by investing in different asset classes and different economies, and with different fund managers using different investing styles.
Diversification can help to reduce the overall risk of a portfolio.
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| Dollar Cost Averaging: |
A technique whereby an investor contributes regular amounts on a fixed schedule, regardless of changes in the market. On average, the investor should end up buying more fund units at a lower price and fewer fund units at a higher price.
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| Efficient Portfolio: |
A portfolio is said to be efficient if it offers the greatest potential return for a given level of risk.
Asset Allocation funds are designed to be efficient.
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| Foreign Content: |
The percentage of foreign investments in your portfolio. Any fund that invests more than 30% in companies from outside of Canada counts as "foreign content" in your portfolio.
Foreign content is measured as the value of the fund when you purchased it, rather than its current value.
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| Global Balanced Fund: |
A fund that invests in a combination of common and preferred stocks, bonds and short-term securities worldwide with the goal of providing a balance between capital preservation and growth while minimizing excessive risk.
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| Global Equity Fund: |
A fund that invests in shares of companies that are incorporated in each of the three geographic regions – Asia, Europe and the Americas.
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| Gross Return: |
The rate of return for a fund before Investment Management Fees have been deducted.
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| Growth Investing Style: |
An investing style that looks for companies with earnings or revenue growth potential that is greater than that of the industry or overall market.
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| Guaranteed Interest Accounts: |
A fund where you earn a fixed interest rate from the day of your deposit until the day of maturity. The interest rate you earn is determined on the day of deposit and does not change.
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| Index: |
A benchmark against which financial or economic performance is measured, such as the TSE 300 or the S&P 500.
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| Index Fund: |
A fund that is managed to track the return of a specified market index such as the TSE 300. With an index fund, the manager does not attempt to anticipate which companies will provide a better return.
Rather, they manage the fund to provide a return as close to the index as possible.
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| Indexing Investing Style: |
An investing style that attempts to mirror the performance of a specific market index by investing all of the securities in that index.
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| Inflation: |
The term used to describe rising prices of goods and services within an economy.
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| Inflation Risk: |
The possibility that increases in the cost of living will significantly erode investment returns.
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| International Equity Fund: |
A fund that invests primarily in shares of companies that are incorporated outside North America.
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| Investment Management Fee: |
This is a fee collected by the fund provider to cover the cost of investment management and administrative costs. The management fee is deducted from the fund before calculation of unit values.
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| Investment Style: |
The methodology that a fund manager uses to decide what securities to invest in.
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| Irrevocable Beneficiary: |
A beneficiary designation that cannot be changed or removed without the written permission of the beneficiary.
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| Locked-In: |
When used in reference to a guaranteed interest account, 'locked-in' means that the investment cannot be withdrawn before the end of the specified term. When used in reference to a Registered Retirement Savings Plan or Registered Pension Plan,
it means that accumulated benefits can only be used for retirement income as specified by applicable legislation.
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| Market-Based Funds: |
Funds that invest in publicly traded securities such as stocks, bonds, and money-market instruments. The value of these funds is not guaranteed, and will fluctuate based on the performance of the securities held by the fund.
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| Market Value: |
The expected sale price of an investment if offered for sale in a fair market. Generally if a guaranteed investment is surrendered prior to its maturity date,
its market value is calculated using the following formula:
where:
i = the current rate of interest applicable to the member for a deposit account with the same term as the original deposit amount.
n = the remaining period to maturity.
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| Market Value Adjustment: |
An adjustment applied to a guaranteed interest investment if it is withdrawn before maturity
which is based on changes in interest rates that have occurred since the investment was purchased.
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| MSCI EAFE: |
Morgan Stanley Capital International (MSCI) maintains an index of EAFE stocks that provides a good measure of the overall performance
of the major stock markets in the economies of Europe, Australasia, and the Far East.
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| MSCI World: |
Morgan Stanley Capital International (MSCI) maintains an index of global stocks that provides a good measure of the overall performance of major stock markets around the world.
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| Net Return: |
The rate of return of a fund after the Investment Management Fee has been deducted.
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| Passively Managed Fund: |
Also called an Index Fund, this is a fund in which the fund manager simply invests in all the securities that make up a benchmark.
The goal of the manager is to mirror the performance of the benchmark rather than outperform it.
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| Portfolio: |
The combined holdings of securities or funds of an individual or institution.
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| Quartile: |
A measure of how a fund has compared versus similar funds.
A fund that has performed in the top quartile has performed better than 75% of similar funds.
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| Rate of Return: |
To calculate the rate of return on your investment, you compare the original amount of the investment to the value of the investment at the end of a specified period of time.
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| Revocable Beneficiary: |
A beneficiary designation that can be changed or removed by the plan member without the consent of the beneficiary.
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| Risk: |
In investing, risk typically refers to the possibility that an investment will lose money. Risk also occurs when investments are too conservative to achieve financial goals.
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| Risk Tolerance: |
An investor's ability to handle declines in the value of his or her portfolio.
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| S&P 500: |
Standard & Poors maintains an index of 500 U.S. stocks that provides a good measure of the overall performance of U.S. stock markets.
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| Science & Technology Fund: |
A fund that invests primarily in companies worldwide whose primary business involves some aspect of science and technology.
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| Sector Rotation Investing Style: |
An investing style that looks first for sectors or industries that are expected to out-perform,
and looks for attractive companies in those sectors or industries.
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| Security: |
A general term for what a fund invests in – such as stocks, bonds and treasury bills.
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| Stock: |
| A stock is an equity or share in a corporation. When you invest in a company's stock, you're buying a piece of the company.
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| Strategic Asset Allocation Fund: |
A fund that invests in a diverse range of asset classes, investing styles, and fund managers with the goal of increasing return and reducing volatility.
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| Stock Exchange: |
A place where licensed investment professionals can buy and sell stocks and other investments.
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| Tax Deferred: |
An investment for which you don't pay tax on the earnings as they accumulate, but at a later date.
In an RRSP or RPP you don't pay tax on the earnings until they are withdrawn from the plan.
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| T-Bills: |
Short term debt instruments issued by governments.
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| Treasury Bills: |
Also called T-bills, these represent short-term debt issued by governments and sold to investment dealers.
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| Top-Down: |
An investing style that primarily looks for attractive sectors of the economy and invests in those sectors.
An example of a sector is "natural resources".
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| TSE 300/TSE 300 Capped: |
An index of the 300 largest companies (by value of outstanding shares) listed on the Toronto Stock Exchange.
The TSE 300 capped is comprised of the same companies as the TSE 300, but limits the value of any one company to 10% of the index.
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| Underlying Fund: |
The funds in Manulife's group retirement plans are fund-on-fund investments, and invest in existing pooled funds, which are referred to as underlying funds.
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| Unit Value: |
The cost per unit of a fund. This is calculated by dividing the market value of the entire fund by the number of units outstanding.
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| U.S. Large Cap Equity Fund: |
A fund that invest primarily in shares of companies, incorporated in the U.S. While the fund may hold some shares of small companies, the fund primarily invests in medium to large companies.
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| U.S. Small to Mid-Cap Equity Fund: |
A fund that invests primarily in shares of small to medium companies that are incorporated in the U.S.
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| Value Investing Style: |
An investing style that looks for companies whose shares are perceived to be undervalued.
This style favours good stocks at great prices over great stocks at good prices.
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| Vesting: |
Refers to the amount of time an individual must be employed or a member of a plan before employer contributions
are owned by the employee. Depending on the terms of the plan as established by the employer, termination, retirement, or withdrawal of funds from the plan may result in the employee's forfeiture of any contributions that have not vested.
An employee who has earned the right to keep all employer contributions is said to be fully vested.
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| Volatility: |
The tendency of a fund's value to fluctuate up and down over time. The value of a fund with high volatility will go up and down more dramatically over time than the value of a fund with low volatility.
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