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Declaration of Trust
Declaration of Trust is a statement made by the title holder of a piece of property that the property is being held for the benefit of another person. The property is placed in a trust, with a trustee overseeing the asset. The declaration outlines who the trust is in benefit of, who can amend or revoke the trust (if it can be amended at all), who will serve as... -
Defined Benefit Plan
Defined Benefit Planis a type of pension plan in which an employer/sponsor promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provided defined benefit plans, sometimes as a means of compensating workers... -
Defined Contribution Plan
Defined Contribution (DC) Planis an employer-sponsored retirement plan that does not promise a specific benefit amount at retirement. Instead, the employer and/or the employee contribute money to each employee’s individual account in the plan. In many cases, employees are responsible for choosing how these contributions are invested, and deciding how much to contribute from their paychecks through pretax deductions. The employer may add to your employees’ accounts, in some... -
Direct Indexing
Direct Indexing is a process that seeks to replicate the performance of an index by directly purchasing the underlying individual securities instead of using an ETF or mutual fund in an investor’s portfolio. For example, rather than purchasing an ETF or a mutual fund that replicates an index, the investor using a direct indexing approach would simply buy all of the securities in an index. The ability to own... -
Directional Funds
A directional fund is a type of hedge fund that maintains some exposure to the market thereby placing less emphasis on hedging risk. Directional funds are less steady but can produce higher returns given that they assume more risk. (Source: TradersLog) -
Discount to NAV
A mutual fund, closed end fund or ETF whose share price is lower than fund’s net asset value (NAV). The occurrence of significant premiums or discounts with ETFs is rare, whereas with closed end funds it’s common. (Source: ETF Guide) -
Duration
Duration in simplified terms, a bond’s duration measures the effect that each 1% change in interest rates will have on the bond’s market value. Unlike the maturity date, which tells you when the issuer has promised to repay your principal, duration, which takes the bond’s interest payments into account, helps you to evaluate how volatile the bond’s price will be over time. Basically, the longer the duration — expressed in... -
Emerging Markets
Countries in the process of building market-based economies are broadly referred to as emerging markets. However, there are major differences among the countries included in this category. Some emerging-market countries, including Russia, have only recently relaxed restrictions on a free-market economy. Others, including Indonesia, have opened their markets more widely to overseas investors, and still others, including Mexico, are expanding industrial production. Their combined stock market capitalization is less... -
Emerging Markets ETF
An exchange-traded fund that focuses on the stocks of emerging market economies, such as Latin America, Asia and Eastern Europe. The underling indexes tracked by emerging market ETFs vary from one fund manager to another, but all should be passively managed and contain equities from multiple countries, unless otherwise stated. Within the broad class of emerging market ETFs, there are fund members that focus on certain market-capitalization ranges, high-dividend...
