Lehman Aggregate Bond Index

This index is composed of U.S. government and corporate bonds, as well as mortgage-backed securities. It is considered the most reflective of the total bond market.

Lehman Government Bond Index

This index is composed of U.S. Treasury and agency bonds. It is reflective of these two sectors of the bond market.

Lehman Intermediate Government/Corporate Bond Index

This index is composed of U.S. government and corporate bonds. It is reflective of these two sectors of the bond market.

Lehman 7 Year Municipal Bond Index

This index tracks municipal bonds with at least a BAA credit rating and with maturities ranging between six and eight years.

Lehman Mutual Fund PA or NJ Index

These indices track state specific municipal bonds.

Lipper Growth Index

This index tracks mutual funds which normally invest in companies whose long-term earnings are expected to grow significantly faster than the earnings of the stocks represented in the major unmanaged stock indices.

Liquidity

How quickly an investment can be turned into cash.

Load

A sales charge or commission assessed by certain mutual funds ("load funds") to cover their selling costs. Mutual funds sold through a broker or salesperson are usually "loaded funds."

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Management Fee

The amount a mutual fund pays to its investment adviser for its services to the fund.

Market Capitilization

The current market price per share of a company multiplied by the number of shares outstanding.

Market Value

The current market price of a security, derived by the number of a company’s stock shares outstanding multiplied by the price per share.

Maturity

The date on which a bond issuer is obligated to repay the amount borrowed to the lender, or investor.

Merrill Lynch 1-year Treasury Index

This index represents the total rate of return of one-year Treasury bills based on daily closing prices.

Merrill Lynch 1-3 Year Treasury Index

This index represents the total rate of return of Treasury bills with a maturity of one to three years based on daily closing prices.

Merrill Lynch 1-3 Year Corporate Index

This index consists of fixed-rate, coupon bearing corporate bonds, with a maturity of one to three years, and a rating of BBB/Baa3 and above.

Minimum Investment

The smallest amount needed to open a new account or to make additional investments in a mutual fund.

Money Market Funds

Mutual funds that invest in short-term securities, such as U.S. Treasury bills, certificates of deposit from large banks, and commercial paper. These funds seek to maintain stability of principal and a constant value of $1 per share. The yield for money market funds changes according to market conditions and interest rates. Money market funds are neither insured nor guaranteed by the U.S. Government, and there is no assurance that they will be able to maintain a net asset value of $1.00. Many funds also offer check writing privileges.

Morgan Stanley MSCI EAFE Index

This index is an arithmetic, market value-weighted average of the performance of over 900 securities listed on the stock exchanges of countries in Europe, Australia, and the Far East. The index is calculated on a total return basis, which includes reinvestment of net dividends before the deduction of withholding taxes.

Municipal Bond

A debt obligation issued by a city, state or municipality. Interest from these bonds is generally exempt from federal income tax.

Mutual Fund

A mutual fund pools the money of many investors and invests it toward a specific goal, such as stability of principal, regular income, or long-term growth. An equity fund pools its money to purchase stocks, a fixed-income fund purchases bonds, and a money market fund purchases short-term debt instruments. The fund’s professional managers choose investments that, in their judgment, will help the fund achieve its goal. A mutual fund investor shares in the fund’s gains, losses, income, and expenses on a proportional basis.

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Net Asset Value (NAV) Per Share

The redemption price of one share of a fund. This figure is calculated by dividing the total value of all the individual securities in a fund, minus expenses, by the total number of shares outstanding. The NAV usually changes from day to day.

No-Action Letter

Letter requested from the Securities and Exchange Commission. In this letter, the Commission agrees not to either take civil or criminal action with respect to the specific activity and circumstances.

No-load Fund

A mutual fund that sells its shares at net asset value, without charging a sales commission, or load.

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Offering Price

The purchase price per share of a mutual fund, determined by adding any applicable sales charge to the fund's net asset value (NAV) per share. Also known as ask price or public offer price.

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Portfolio

All the securities that are held by a mutual fund, or a term for describing all the investments you own: stocks, bonds, mutual funds, etc. A diversified portfolio contains a variety of investments.

Portfolio Diversification

Holding a variety of securities in a portfolio to reduce risk.

Portfolio Manager

The individual who is responsible for managing a mutual fund's assets.

Principal, or Par Value

The face value of a bond. Also the amount on which interest payments are calculated.

Prospectus

An explanatory booklet distributed by the issuer of a security or mutual fund, in compliance with SEC regulations. A mutual fund prospectus must include the fund’s investment objective, expenses and fees, including management and sales fees, a description of shareholder services offered, and information on how to buy shares.

Proxy

The document forwarded to shareholders of a mutual fund requesting that they vote on certain key issues at the fund's annual meeting.

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