Profits realized on the sale of stocks in a fund's portfolio. Capital gains can be distributed to shareholders, or reinvested to buy additional shares. The mutual fund policy of spreading its investments among many different securities to reduce the risks inherent in only owning a small number of individual stocks. Dividends can be paid in cash, or reinvested in additional shares. The practice of investing equal amounts of money at regular intervals, regardless of rising or falling markets.
Effective yield is always higher than current yield.
A fund's costs of doing business. This ratio is disclosed in the fund prospectus, as a percent of its assets. A fund's investment objective is stated in the prospectus. The market value of all the assets in a fund, divided by the number of shares outstanding. A fund that does not carry a sales charge.