A
Annual Return
The rate of return that a fund earned over a specific 12-month period.

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.

C
Compound Interest
Interest paid on both the original investment, as well as on the interest the investment accumulates.

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.

D
Dollar cost averaging
A technique whereby an investor contributes the same amount on a fixed schedule, regardless of changes in the market. On average, the investor should end up buying more investments at a lower price and fewer investments at a higher price.

Diversification
The practice of spreading your investment risk by investing in several asset classes - each with its own risk characteristics.

F
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.

Fund manager
The person whose job is to select the investments to be bought and sold in order to meet the underlying fund's investment objective. Each fund in your plan is managed by a professional fund manager.

G
Gross Return
The rate of return for a fund before Investment Management Fees have been deducted.

I
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.

Inflation risk
The possibility that increases in the cost of living, will reduce erode investment returns.

Institutional Fund
An institutional fund is sold by way of an "Offering Memorandum" which outlines a fund's investment policies and guidelines. Institutional pooled funds are subject to less stringent regulations than their retail mutual fund counterparts.

Investment Style
The methodology that a fund manager uses to decide what securities to invest in.

N
Net Return
The rate of return of a fund after Investment Management Fees have been deducted.

P
Portfolio
The combined holdings of securities or funds of an individual or institution.

R
Risk
The possibility that an undesired event will take place. In investing, risk typically refers to the possibility that an investment will return less than expected.

Risk Tolerance
An investor's ability to handle declines in the value of his or her portfolio.

V
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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