A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- ETF (Exchange-Traded Fund)A basket of investments that trades like a single stock, letting you own many holdings at once with one purchase.
- Index FundA fund that owns a broad slice of the market at low cost — the backbone of most investing.
- Expense RatioThe yearly fee a fund charges, shown as a percentage of your investment, that covers its operating costs.
- NAV (Net Asset Value)The per-share value of a fund, calculated by dividing its total holdings' value by the number of shares.
- Actively Managed FundA fund where managers pick investments trying to beat the market, usually charging higher fees than index funds.
- ProspectusA required document that describes a fund or investment's goals, costs, risks, and holdings before you buy.
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