Glossary
F to I |
F |
| Fees |
|
A
charge or expense for services rendered. |
| Fixed
Income |
|
A
security or mutual fund that periodically pays interest. |
| Fund
of Funds |
|
A
fund or investment option within a 401(k) plan that invests
in multiple funds. |
| |
|
|
G |
| Global
Stock Fund |
|
An
investment option that invests in U.S. and non-U.S. stocks |
| Government
Bond Fund |
|
An
investment option that invests in bonds issued by the U.S. government.
|
| Great
Depression |
|
The
global economic decline that occurred after the 1929 stock market
crash and lasted until World War II. |
| Growth
Stock |
|
A
stock which many investors believe will achieve earnings increases
greater than the market (or the industry that it is a part of)
for the foreseeable future. |
| Guaranteed
Investment Contracts (GICs) |
|
A
contract issued by an insurance company that promises to pay
periodic interest and return the initial investment at some
point in the future. Under current accounting rules, the value
of the contract is not required to be marked-to-market like
most other investments in a 401(k) plan. |
| |
|
|
H |
| Hardship
Withdrawals |
|
Withdrawals
that the IRS permits where the participant faces immediate and
heavy financial need. |
| High-Yield
Bonds |
|
Corporate
bonds that pay interest rates that are much higher than other
companies with better credit ratings. High-yield bonds are also
called junk bonds. |
| Hybrid
Fund |
|
Funds
that invest in a combination of stocks and bonds. Depending
on the risk level and type of investing hybrid funds may be
categorized into balanced, asset allocation or life cycle funds.
|
| |
|
|
I |
| In-Service
Withdrawal |
|
A 401(k) plan withdrawal while an employee is still working
at the company that sponsors the plan. |
| Index |
|
A group of securities that reflect the performance of a market
or portion of a market. For example, the Standard & Poor's
Composite Index of 500 stocks reflects the performance of the
entire U.S. stock market. |
| Index
Fund |
|
A
passively managed portfolio of securities where all or a statistical
sample of the securities in an index are held in the same proportion
as the benchmark index. An index fund should have the same performance
as the index it manages against, less the fund's expenses. |
| Inflation |
|
The
ongoing increase in prices for goods and services in the economy.
|
| Inflation
Risk |
|
The
chance that an investment will not grow faster than the rate
of inflation and will lose purchasing power. |
| Inflation-Adjusted
Compounded Return |
|
The
compounded return of an investment adjusted to reflect the rate
of inflation. |
| Insurance
Contracts |
|
See
Guaranteed Investment Contracts (GICs). |
| Interest |
|
The
fee paid by the borrower to the lender in a debt transaction.
|
| International
Stock Fund |
|
A
stock fund that only invests in non-U.S. stocks, i.e., foreign
companies. |
