Investment

What is a Broker?

A broker is:

An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor.
The role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.
A licensed real estate professional who typically represents the seller of a property. A broker's duties may include: determining market values, advertising properties for sale, showing properties to prospective buyers, and advising clients with regard to offers and related matters.

What are UITs?

UITs stands for Unit Investment Trusts. It is an investment company that offers a fixed, unmanaged portfolio, generally of stocks and bonds, as redeemable ""units"" to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income. Unit investment trusts are one of three types of investment companies the other two are mutual funds and closed-end funds.

What is a Custodian?

A custodian is a financial institution that has the legal responsibility for a customer's securities. This implies management as well as safekeeping.

What is a Country Breakdown?

A country breakdown is the percentage of assets in a mutual fund listed by country.

What is a Country Fund?

A country fund is an international mutual fund with a portfolio that consists entirely of securities, generally stocks, of companies located exclusively in a given country.

What is an Index Fund?

An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover. Other indexes include.

Russell 2000 (small companies), DJ Wilshire 5000 (total stock market), MSCI EAFE (foreign stocks in Europe, Australasia, Far East), Lehman Aggregate Bond Index (total bond market)."

What are Fund Regulations?

Mutual funds are regulated by the Securities and Exchange Commission under the Investment Company Act of 1940.

What is a High Yield Bond Fund?

A high yield bond fund is a type of mutual fund investing primarily in high paying bonds with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds. These are also known as ""junk bonds"".

What is a Managed Account?

Managed Account is also known as fee-based accounts. An investment advisor will charge a fee to manage a portfolio. The fee is usually a percentage of the assets under management. Additionally, the mutual funds held in the account will have annual operating expenses. It is always important to read the prospectus before investing. Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution.

What is a Hedge Fund?

A hedge fund is an aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets with the goal of generating high returns (either in an absolute sense or over a specified market benchmark). Legally, hedge funds are most often set up as private investment partnerships that are open to a limited number of investors and require a very large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year.

What are U.S. Treasury securities?

US Treasury Securities are the US Treasury issued debt instruments, also known as Treasury Bonds, Notes, and Bills. These obligations are backed by the "Full Faith and Credit of the US Government".

Treasury Bill - short-term debt obligation usually with maturities of less than one year, sold in denominations of $1000.
Treasury Notes - A marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. Treasury notes can be bought either directly from the U.S. government or through a bank.
Treasury Bond - A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest payments semi-annually and the income that holders receive is only taxed at the federal level.

What are Peers?

Peers is a term used to describe companies with similar attributes. Usually describes companies in the same industry. Also used to describe mutual funds that have similar investment objectives (i.e. large-cap growth, large-cap value, small-cap growth, small-cap value, etc.).

What are Over-the-Counter (OTC) Stocks?

Stocks not traded on a national securities exchange.

What are Target Risk Fund?

A target risk fund is a fund that attempts to expose its investors to a specified amount of risk. The fund manager of a target risk fund is responsible for overseeing all the securities owned within the fund, to ensure that the level of risk isn't greater or less than the fund's target amount of risk exposure. Target risk funds typically label themselves as ""conservative"", ""moderate risk"" or ""aggressive"" in terms of their risk exposure. Regardless of the label applied, the intent is to offer a relatively constant level of risk exposure to investors.

How are Mutual Funds priced?

Mutual funds are generally priced with a combination of Sales Charge (also known as Load) and Total Annual Operating Expenses (a percentage of total assets that the mutual fund charges for managing the fund). Some funds may also have a Contingent Deferred Sales Charge (CDSC also know as a back-end Load). The most common funds are listed below. It is important to remember that there is always a cost which is outlined in the prospectus.

Do you cash savings bonds?

At this time, we do not cash or negotiate Savings Bonds for members.

For more information, please visit the Treasury Direct website at https://www.treasurydirect.gov/

What is No-Load?

No front end sales charge and annual operating expenses that vary dramatically. Usually there is no CDSC. No-load funds are for people who choose their own investments. They are not distributed through financial advisers unless they are part of a managed account.

What are Micro Caps?

Micro caps refer to companies with market capitalization of between $50 million and $300 million.

What are Mid Caps?

Mid cap is a term that refers to a company with a market capitalization between $2 billion and $10 billion.

What are Broker's Loans?

Money borrowed by brokers from banks for uses such as financing specialists, inventories of stock, financing the underwriting of new issues of corporate and municipal securities, and financing customer margin accounts.

What are Independent Auditors?

An independent auditor is an external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report.

What are Class A and B and C Shares?

A Shares - A front end sales charge and usually a comparatively lower annual operating expense. No CDSC.
B Shares - No front end sales charge and usually a comparatively higher annual operating expense. A CDSC is usually charged for some period of time (i.e. 5, 6, 7 years), however, after some period of time after the CDSC has expired, most B Shares will convert to A Shares and charge the lower annual operating expense.
C Shares - No front end sales charge and usually a comparatively higher annual operating expense. A CDSC, usually 1%, will be charged for 1 year only. C shares do not convert to another class, so the operating expenses will remain the same. C Shares are often used for shorter investment time frames.

What are Open Market Operations?

Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the depository system and foster expansion in money and credit sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. They are used to promote either higher or lower growth in money and credit and to offset undesired changes in the reserve positions of depository institutions stemming from movements in currency, float, Treasury deposits, and other factors.

What are Large Caps?

Large cap is a term used by the investment community to refer to companies with a market capitalization of more than $10 billion. Market capitalization is calculated by multiplying the number of a company's shares outstanding by it's stock price.

What are Series Funds?

A term used in the United States to describe an umbrella fund. See 'Umbrella Fund'.

What are Tranches?

A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. ""Tranche"" is the French word for ""slice"".

What is a Fund of Funds?

A fund of funds is a mutual fund that invests in mutual funds. A fund of funds allows investors to achieve a broad diversification and an appropriate asset allocation with investments in a variety of fund categories that are all wrapped up into one fund.

What is a CDO?

CDO stands for Collateralized Debt Obligation. CDO is an investment-grade security backed by a pool of bonds, loans and other assets. CDOs do not specialize in one type of debt but are often non-mortgage loans or bonds. Similar in structure to a collateralized mortgage obligation (CMO) or collateralized bond obligation (CBO), CDOs are unique in that they represent different types of debt and credit risk. In the case of CDOs, these different types of debt are often referred to as 'tranches' or 'slices'. Each slice has a different maturity and risk associated with it. The higher the risk, the more the CDO pays.

Do you offer retirement planning and investment services?

Yes, we offer these services through our Oregonians Financial Planning program.

Whether you are a first time investor or an experienced pro, you will be able to find the information, products and help you need through the credit union's program.

Our Financial Advisor can explain your investment options, such as mutual funds, variable annuities, life insurance, long-term care insurance and brokerage to provide a total package.

Click here for more information:

https://www.oregonianscu.com/resources/financial-planning.htm

What is a Derivative?

A derivative is a security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.

What is a Growth Fund?

A growth fund is a diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no dividend payouts. Portfolio companies would mainly consist of companies with above-average growth in earnings that reinvest their earnings into expansion, acquisitions, and/or research and development.

What is an Index?

An index is a statistical measure of change in an economy or a securities market. In the case of financial markets, an index is an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. Thus, the percentage change is more important than the actual numeric value.

What is a Portfolio Fund?

A mutual fund in which the investments are spread over different asset classes.

What are Futures?

Futures is a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. Futures contracts detail the quality and quantity of the underlying asset they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash. The futures markets are characterized by the ability to use very high leverage relative to stock markets.

What does CDSC stand for?

CDSC stands for Contingent Deferred Sales Charge (also known as a back end Load).

What is a Day Trade?

A day trade is buying and selling a stock in the same day to capture short term moves in a stock price.

What are Index Shares?

An index fund that is continuously dealt on an Exchange. See 'ETF'.

How are Mutual funds priced?

Mutual funds are generally priced with a combination of Sales Charge (also known as Load) and Total Annual Operating Expenses (a percentage of total assets that the mutual fund charges for managing the fund). Some funds may also have a Contingent Deferred Sales Charge (CDSC also know as a back-end Load). The most common funds are listed below. It is important to remember that there is always a cost which is outlined in the prospectus.

What are Distributions?

There are a number of types of distributions:

A company's payment of cash, stock or physical products to its shareholders.
The removal of assets from a retirement account. The assets are then paid to the retirement account owner or beneficiary. There are many rules associated with retirement plan distributions and it is a good idea to consult a professional.
Distributions of income and capital gains that mutual funds make to their investors periodically during a calendar year.

What are Total Assets?

Total assets is the current market value of all investments in a mutual fund.

What are UCITS?

UCITS stands for Undertakings for the Collective Investment of Transferable Securities. It is a public limited company that coordinates the distribution and management of unit trusts amongst countries within the European Union.

What are Major Holdings?

Major holdings are the top ten holdings (or investments) in a portfolio measured by market value.

What is a Duration?

Duration is an indicator of the price sensitivity of a bond (or of a bond fund) to a parallel shift in the yield curve. The higher the duration, the more sensitive the price. Duration is used as a measure of risk for bond portfolios (or a bond fund).

What is a Balanced Fund?

A balanced fund is a fund that combines a stock component, a bond component and, sometimes, a money market component, in a single portfolio. Generally, these hybrid funds stick to a relatively fixed mix of stocks and bonds that reflects either a moderate (higher equity component) or conservative (higher fixed-income component) orientation.

What are Small Caps?

The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.

What is a Money Market?

The Money Market is a segment of the financial market in which debt securities with high liquidity and very short maturities are traded. Money Market securities consist of negotiable certificates of deposit (CD's), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements.