Mutual Funds Glossary

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Ladder

A fixed income investment strategy that seeks to reduce interest rate risk by investing in fixed income securities with a wide variety of maturities. Though this strategy assures continuous cash flow, there may be some sacrifice of total return, since shorter-term bonds tend to have lower yields than longer-term bonds.

Large-Caps

Stocks of companies with market capitalizations of more than $1 billion. Large-caps tend to be well established companies, so that their stocks entail less risk than smaller-caps, but which also offer less potential for dramatic growth.

Latin American Fund

A fund that invests primarily in the securities of companies in Latin American countries.

Letter of Intent

An agreement calling for an investor to invest a specific amount in a fund over a defined period in order to qualify for reduced sales charges. The reduced sales charge may apply to an individual fund or to all the funds operated by a single investment management firm.

Lipper Analytical Services Inc.

A leading mutual fund research and tracking firm. Lipper categorizes funds by objective and size, and then ranks fund performance within those categories.

Lipper Indicdes

The Lipper Analytical Indices are equally weighted indices of typically the 30 largest mutual funds within their respective investment objectives. Returns are adjusted for the reinvestment of capital gains distributions and income dividends.

Liquidity

The ease with which an investment can be converted into cash. Shares in a fund are generally considered highly liquid investments because they can be sold on any business day for their then current value (which may be more or less than an investor's original cost).

Load

A sales charge assessed by certain mutual funds (load funds) to cover selling costs. A front-end load is charged at the time of purchase. A back-end load is charged at the time of sale.

Long-Term Funds

All funds other than short-term funds (i.e., money market funds).

Low-Load

A sales charge of 3% or less.