Glossary

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Rate of Return

The gain or loss on an investment over a period of time. The rate of return is typically reported on an annual basis and expressed as a percentage.

Real Rate of Return

The rate of return on an investment adjusted for inflation.

Rebalance

The process of moving money from one type of investment to another to maintain a desired asset allocation.

Redemption

To sell fund shares back to the fund. Redemption can also be used to mean the repayment of a bond on or before the agreed upon pay-off date

Redemption Fee

A fee, generally charged by a mutual fund, to discourage certain trading practices by investors, such as short-term or excessive trading. If a redemption fee is charged it is done when the investment is redeemed or sold.

Return

The gain or loss on an investment. A positive return indicates a gain, and a negative return indicates a loss.

Risk

The potential for investors to lose some or all the amounts invested or to fail to achieve their investment objectives.

Risk Tolerance

An investor’s ability and willingness to lose some or all of an investment in exchange for greater potential returns.

Round Trip Restriction

A policy that limits the number of times an investor can exchange into and out of a fund within a given time frame. This is intended to discourage frequent trading that increases the costs to all the fund’s investors.

Russell Indexes

A group of indexes that are widely used to benchmark investment performance. The most common Russell index is the Russell 2000 Index, an index of U.S. small-cap stocks, which measures the performance of the 2,000 smallest U.S. companies in the Russell 3000 Index.