Glossary of Investment Terms:
401K Plan: A plan that allows employees to contribute pretax earnings to a qualified tax-deferred retirement plan, also called “cash or deferred arrangement” (CODA) or “salary reduction plan.” Withdrawals for other than death, disability, termination of employment, or qualifying hardship prior to the age of 59 and one-half may be subject to a 10% penalty tax.
(AMEX) American Stock Exchange: The third largest stock exchange in the United States. The AMEX is located in New York and handles approximately 10% of all securities traded in the States. The AMEX has recently merged with the NASDAQ.
Active Management: The trading of securities to take advantage of market opportunities as they occur, in contrast to passive management. Active managers rely on research, market forecasts, and their own judgment and experience in selecting securities to buy and sell.
Aggressive: An investment approach that accepts above-average risk of loss in return for potentially above-average investment returns.
Aggressive Growth Fund: An investment fund that takes higher risk of loss in return for potentially higher returns or gains.
Annual Report: A yearly report or record of an investment’s (e.g., a mutual fund’s or company’s) financial position and operations.
Annual Rate of Return: The annual rate of gain or loss on an investment expressed as a percentage.
Appreciation: An increase in the value of an asset.
Asset: Any item of value owned by an individual or a corporation. The most common differentiations are:
- Current asset: an item of value that turns into cash within a year.
- Fixed asset: an item of value used in the conduct of a business that, ordinarily, is not converted into cash within a year.
- Intangible asset: an item of value whose resale value is difficult to determine. Assets may consists of both financial and non-financial assets, short term or liquid assets, long term, illiquid assets and even intangible assets such as good will.
Asset Allocation: The way an investment portfolio is divided among various asset classes, such as cash investments, bonds, and stocks. Also known as investment mix.
Asset Classes: General categories of investments. The three major asset classes are cash investments, bonds, and stocks.
Average Annual Total Return: The yearly average percentage increase or decrease in an investment’s value that includes dividends, gains, and changes in share price.
Average Quality: An indicator of credit risk, this figure is the average of the credit ratings assigned to the fund holdings by credit rating agencies. Agencies assign credit ratings after appraising an issuer’s ability to meet its obligations. Quality is graded on a scale, with AAA/Aaa indicating the most creditworthy issuers.
Balanced Fund: A fund with an investment objective of both long-term growth and income, through investment in both stocks and bonds.
Basis Point: One-hundredth of one percent, or 0.01%. For example, 20 basis points equal 0.20%. Investment expenses, interest rates, and yield differences among bonds are often expressed in basis points.
Benchmark: An unmanaged group of securities whose overall performance is used as a standard to measure investment performance.
Bloomberg Barclays Capital U.S. Aggregate Bond Index: A common index widely used to measure performance of U.S. bond funds.
Bond: A long-term promissory note in which the issuer agrees to pay the owner the amount of the face value on a future date and to pay interest at a specified rate at regular intervals.
Bond Fund: A fund that invests primarily in bonds and other debt instruments.
Bond Rating: A rating or grade that is intended to indicate the credit quality of a bond, considering the financial strength of its issuer and the likelihood that it will repay the debt. Agencies such as Standard & Poor’s, Moody’s Investors Service, and Fitch issue ratings for different bonds, ranging from AAA (highly unlikely to default) to D (in default).
Book Value: The value of deposits, plus accumulated interest, minus withdrawals. May also be referred to as contract value.
Broker: A person who acts as an intermediary between the buyer and seller of a security, insurance product, or mutual fund, often paid by commission. The terms broker, broker/dealer, and dealer are sometimes used interchangeably.
Brokerage Window: A plan feature that permits participants to purchase investments that are not included among the plan’s general menu of designated investment alternatives.
Capitalization (Cap): The total market value of a company’s outstanding equity.
Capital Appreciation Fund: An investment fund that seeks growth in share prices by investing primarily in stocks whose share prices are expected to rise.
Capital Gain: An increase in the value of an investment, calculated by the difference between the net purchase price and the net sale price.
Capital Loss: The loss in the value of an investment, calculated by the difference between the purchase price and the net sale price.
Capital Preservation: An investment goal or objective to keep the original investment amount (the principal) from decreasing in value.
Cash Equivalent: An investment that is short term, highly liquid, and has high credit quality.
Common Stock: An investment that represents a share of ownership in a corporation.
Competing Funds: An investment fund that is identified by the investment manager of another fund and which is subject to special rules relating to an investor’s ability to buy and sell investments between the two funds. See Equity Wash Restriction.
Compounding: The cumulative effect that reinvesting an investment’s earnings can have by generating additional earnings of their own.
Conservative: An investment approach that accepts lower rewards in return for potentially lower risks.
Corporate Bond: A bond issued by a corporation, rather than by a government. The credit risk for a corporate bond is based on the repayment ability of the company that issued the bond.
Credit Risk: The risk that a bond issuer will default, meaning not repay principal or interest to the investor as promised. Credit risk is also known as “default risk.”
CRSP U.S. Total Market Cap Index: The investable CRSP indexes capture broad U.S. equity market coverage and include securities traded on NYSE, NYSE Market, NASDAQ or ARCA. Nearly 4,000 constituents across mega, large, small and micro capitalizations, representing nearly 100% of the U.S. investable equity market, comprise the CRSP U.S. Total Market Index.
Current Yield: The current rate of return of an investment calculated by dividing its expected income payments by its current market price.
Custodian: A person or entity (e.g., bank, trust company, or other organization) responsible for holding financial assets.
Credit Analysis: The study of the financial condition of an entity to ascertain its creditworthiness. The credit ratings of corporate and municipal bonds reflect the rating agency’s opinion of their financial condition and histories.
Deflation: The opposite of inflation — a decline in the prices of goods and services.
Depreciation: A decrease in the value of an investment.
Designated Investment Alternative: The investment options picked by your plan into which participants can direct the investment of their plan accounts.
Diversification: The strategy of investing in different asset classes and among the securities of many issuers in an attempt to lower overall investment risk.
Dividends: A payment of cash or stock from a company’s earnings to each stockholder as declared by the company’s board of directors.
Dividend Yield: A financial ratio that shows how much a company pays out in dividends each year relative to its share price. The formula is: Annual dividends/price per share.
Dow Jones Industrial Average (Dow or DJIA): A widely followed price-weighted index of 30 of the largest, most widely held U.S. stocks.
Emerging Market: Generally, economies that are in the process of growth and industrialization, such as in Africa, Asia, Eastern Europe, the Far East, Latin America, and the Middle East which, while relatively undeveloped, may hold significant growth potential in the future. Investing in these economies may provide significant rewards, and significant risks. May also be called developing markets.
Emerging Market Fund: A fund that invests primarily in emerging market countries.
Equity/Equities: A security or investment representing ownership in a corporation, unlike a bond, which represents a loan to a borrower. Often used interchangeably with “stock.”
Equity Fund: A fund that invests primarily in equities.
Equity Wash Restriction: A provision in certain stable value or fixed income products under which transfers made from the stable value or fixed income product are required to be directed to an equity fund or other non-competing investment option of the plan for a stated period of time (usually 90 days) before those funds may be invested in any other plan provided competing fixed income fund (such as a money market fund).
ERISA: The Employee Retirement Income Security Act of 1974. ERISA is the federal law that regulates retirement plans.
Exchange: The market platform that offers the purchase and sale of securities through which brokers trade securities. An exchange may be located in the U.S. or overseas for some products such as futures or options on futures.
Exchange Traded Fund (ETF): An investment company, such as a mutual fund, whose shares are traded throughout the day on stock exchanges at market-determined prices.
Expense Ratio: A measure of what it costs to operate an investment, expressed as a percentage of its assets or in basis points. These are costs the investor pays through a reduction in the investment’s rate of return. See Operating Expenses and Total Annual Operating Expenses.
Federal Deposit Insurance Corporation (FDIC): A federal agency that insures money on deposit in member banks and thrift institutions.
Fiduciary: A fiduciary is a person or entity who performs one or more of the following:
- Exercises discretionary authority or control over the plan’s management.
- Exercises authority or control over the management or disposition of the plan’s assets.
- Renders investment advice for a fee or other compensation with respect to plan funds or property.
- Has discretionary authority or responsibility over the plan’s administration.
Financial Industry Regulatory Authority (FINRA): A self-regulatory organization for brokerage firms doing business in the United States. FINRA operates under the supervision of the SEC. The organization’s objectives are to protect investors and ensure market integrity.
Financial Statements: The written record of the financial status of a fund or company, usually published in the annual report. The financial statements generally include a balance sheet, income statement, and other financial statements and disclosures.
Fixed Income Fund: A fund that invests primarily in bonds and other fixed-income securities, often to provide shareholders with current income.
Fixed Return Investment: An investment that provides a specific rate of return to the investor.
FTSE Global All Cap ex US Index: The FTSE Global All Cap ex US Index is part of a range of indices designed to help US investors benchmark their international investments. The index comprises large, mid and small cap stocks globally excluding the US. The index is derived from the FTSE Global Equity Index Series (GETS), which covers 98% of the of the world’s investable market capitalization.
Fund Family: A group or “complex” of mutual funds, each typically with its own investment objective, and managed and distributed by the same company. A Fund Family also could refer to a group of collective investment funds or a group of separate accounts managed and distributed by the same company.
Fund of Funds: A mutual fund, collective investment fund or other pooled investment that invests primarily in other mutual funds, collective investment funds or pooled investments rather than investing directly in individual securities (such as stocks, bonds or money market securities).
Glide Path: The change over time in a target date fund’s asset allocation mix to shift from a focus on growth to a focus on income.
Global Fund: A fund that invests primarily in securities anywhere in the world, including the United States.
Government Securities: Any debt obligation issued by a government or its agencies (e.g., Treasury Bills issued by the United States).
Growth Fund: A fund that invests primarily in the stocks of companies with above-average risk in return for potentially above-average gains. These companies often pay small or no dividends and their stock prices tend to have the most ups and downs from day to day.
Growth and Income Fund: A fund that has a dual strategy of growth or capital appreciation and current income generation through dividends or interest payments.
Inception Date: The date that a fund began operations.
Income Fund: A fund that primarily seeks current income rather than capital appreciation.
Index: An unmanaged group of securities whose overall performance is used as a benchmark. An index may be broad or focus on one sector or type of security.
Index Fund: An investment fund that seeks to parallel the performance of a particular stock market or bond market index. Index funds are often referred to as passively managed investments.
Indexing: Low-cost investment strategy that seeks to match, rather than outperform, the return and risk characteristics of an index, by holding all securities that make up the index or a statistically representative sample of the index. Also known as passive management.
Inflation: The overall general upward price movement of goods and services in an economy. Inflation is one of the major risks to investors over the long term because it erodes the purchasing power of their savings.
Interest/Interest Rate: The fee charged by a lender to a borrower, usually expressed as an annual percentage of the principal. For example, someone investing in bonds will receive interest payments from the bond’s issuer.
Interest Rate Risk: The possibility that a bond’s or bond fund’s market value will decrease due to rising interest rates. When interest rates (and bond yields) go up, bond prices usually go down and vice versa.
International Fund: A fund that invests primarily in the securities of companies located, or with revenues derived from, outside of the United States.
Investment Adviser: A person or organization hired by an investment fund or an individual to give professional advice on investments and asset management practices.
Investment Company: A corporation or trust that invests pooled shareholder dollars in securities appropriate to the organization’s objective. The most common type of investment company, commonly called a mutual fund, stands ready to buy back its shares at their current net asset value.
Investment Mix: See Asset Allocation.
Investment Objective: The result desired by an investor or mutual fund, such as current income or capital appreciation.
Investment Return: The gain or loss on an investment over a certain period, expressed as a percentage. Income and capital gains or losses are included in calculating the investment return.
Investment Risk: The possibility of losing some or all of the amounts invested or not gaining value in an investment.
Investor Profile: A description of the type of investor who might consider investing in a particular fund.
Large Capitalization (Cap): A reference to either a large company stock or an investment fund that invests in the stocks of large companies.
Large Cap Fund: A fund that invests primarily in large cap stocks.
Large Cap Stocks: Stocks of companies with a large market capitalization. Large caps tend to be well-established companies, so their stocks typically entail less risk than smaller caps, but large-caps also offer less potential for dramatic growth.
Lifecycle Fund: A fund designed to provide varying degrees of long-term appreciation and capital preservation based on an investor’s age or target retirement date through a mix of asset classes. The mix changes over time to become less focused on growth and more focused on income. Also known as “target date retirement” or “age-based” funds.
Lifestyle Fund: A fund that maintains a predetermined risk level and generally uses words such as “conservative,” “moderate,” or “aggressive” in its name to indicate the fund’s risk level. Used interchangeably with “target risk fund.”
Lipper: A leading mutual fund research and tracking firm. Lipper categorizes funds by objective and size, and then ranks fund performance within those categories.
Liquidity: The ease with which an investment can be converted into cash. If a security is very liquid, it can be bought or sold easily. If a security is not liquid, it may take additional time and/or a lower price to sell it.
Market Capitalization: A determination of a company’s value, calculated by multiplying the total number of company stock shares outstanding by the price per share. Also called capitalization.
MSCI EAFE Index: An index known by an acronym for the Europe, Australasia, and Far East markets produced by Morgan Stanley Capital International (MSCI). Markets are represented in the index according to their approximate share of world market capitalization. The index is a widely used benchmark for managers of international stock fund portfolios.
MSCI US Broad Market Index: The MSCI US Broad Market Index represents the universe of companies in the US equity market, including large, mid, small and micro cap companies. This index targets for inclusion 99.5% of the capitalization of the US equity market. The MSCI US Broad Market Index is the aggregation of the MSCI US Investable Market 2500 and Micro Cap Indices.
MSCI AC World ex USA: The MSCI AC World ex USA Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, excluding the USA. The Index consists of 45 country indices comprising 22 developed and 23 emerging market country indices. The developed market country indices included are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The emerging market country indices included are: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.
Management Fee: A fee or charge paid to an investment manager for its services.
Market Capitalization or Market Cap: The total market value of a company’s outstanding securities, excluding current liabilities.
Market Risk: The possibility that the value of an investment will fall because of a general decline in the financial markets.
Maturity Date: The date on which the principal amount of a loan, bond, or any other debt becomes due and is to be paid in full.
Mid Capitalization (Cap): A reference to either a medium sized company stock or an investment fund that invests in the stocks of medium-sized companies.
Mid Cap Fund: A fund that invests primarily in mid-cap stocks.
Mid Cap Stocks: Stocks of companies with a medium market capitalization. Mid caps are often considered to offer more growth potential than larger caps (but less than small caps) and less risk than small caps (but more than large caps).
Money Market Fund: A mutual fund that invests in short-term, high-grade fixed-income securities, and seeks the highest level of income consistent with preservation of capital (i.e., maintaining a stable share price).
Morningstar: A leading mutual fund research and tracking firm. Morningstar categorizes funds by objective and size, and then ranks fund performance within those categories.
Mutual Fund: An investment company that pools the money of many shareholders and invests it in a variety of securities in an effort to achieve a specific objective over time.
NASDAQ: A computerized system established by the FINRA to facilitate trading by providing broker/dealers with current bid and ask price quotes on over-the-counter stocks and some listed stocks. Unlike the AMEX and the NYSE, the NASDAQ (once an acronym for the National Association of Securities Dealers Automated Quotation system) does not have a physical trading floor that brings together buyers and sellers. Instead, all trading on the NASDAQ exchange is done over a network of computers and telephones. Also, the NASDAQ does not employ market specialists to buy unfilled orders like the NYSE does. The NASDAQ began when brokers started informally trading via telephone; the network was later formalized and linked by computer in the early 1970s. In 1998 the parent company of the NASDAQ purchased the AMEX, although the two continue to operate separately. Orders for stock are sent out electronically on the NASDAQ, where market makers list their buy and sell prices. Once a price is agreed upon, the transaction is executed electronically.
Net Asset Value (NAV): The market value of a mutual fund’s total assets, minus liabilities, divided by the number of shares outstanding. The value of a single share is called its share value or share price.
New York Stock Exchange (NYSE): The NYSE is the largest equity exchange in the world. Founded in 1789, it has a global market capitalization of over $15 trillion. Common and preferred stock, bonds, warrants, and rights are all traded on the NYSE, which is also known as the Big Board.
Operating Expenses: The expenses associated with running or operating an investment fund. Operating expenses may include custody fees, management fees, and transfer agent fees. See Expense Ratio and Total Annual Operating Expenses.
Passive Management: See indexing.
Portfolio: A collection of investments such as stocks and bonds that are owned by an individual, organization, or investment fund.
Portfolio Manager: The individual, team or firm who makes the investment decisions for an investment fund, including the selection of the individual investments.
Portfolio Turnover Rate: A measure of how frequently investments are bought and sold within an investment fund during a year. The portfolio turnover rate is usually expressed as a percentage of the total value of an investment fund.
Price/Earnings (P/E) Ratio: The share price of a stock divided by its per-share earnings over the past year. For a portfolio, the weighted average P/E ratio of the stocks in the portfolio. P/E is a good indicator of market expectations about a company’s prospects; the higher the P/E, the greater the expectations for a company’s future growth in earnings.
Principal: The original dollar amount of an investment. Principal may also be used to refer to the face value or original amount of a bond.
Prospectus: Formal written offering document used to sell securities, which enables an investor to make an informed decision. The prospectus describes the fund’s objectives, investment strategy, risks, fees, and other important information. It also includes a financial statement and other essential data.
Rate of Return: The gain or loss on an investment over a period of time. The rate of return is typically reported on an annual basis and expressed as a percentage.
Real Rate of Return: The rate of return on an investment adjusted for inflation.
Rebalance: The process of moving money from one type of investment to another to maintain a desired asset allocation.
Redemption: To sell fund shares back to the fund. Redemption can also be used to mean the repayment of a bond on or before the agreed upon pay-off date.
Redemption Fee: A fee, generally charged by a mutual fund, to discourage certain trading practices by investors, such as short-term or excessive trading. If a redemption fee is charged it is done when the investment is redeemed or sold.
Return: The gain or loss on an investment. A positive return indicates a gain, and a negative return indicates a loss.
Risk: The potential for investors to lose some or all the amounts invested or to fail to achieve their investment objectives.
Risk Tolerance: An investor’s ability and willingness to lose some or all of an investment in exchange for greater potential returns.
Risk/Reward: The relationship between the degree of risk associated with an investment and its return potential. Typically, the higher the potential return of an investment, the greater the risk.
Sector: A group of stocks, often related to a particular industry that have certain shared characteristics.
Sector Fund: A fund that invests in a particular or specialized segment of the marketplace, such as stocks of companies in the software, healthcare, or real estate industries.
Securities and Exchange Commission (SEC): Government agency created by Congress in 1934 to regulate the securities industry and to help protect investors. The SEC is responsible for ensuring that the securities markets operate fairly and honestly.
Security: A general term for stocks, bonds, mutual funds, and other investments.
Separate Account: An insurance company account that is segregated or separate from the insurance company’s general assets. Also refers to a fund managed by an investment adviser for a single plan.
Share: A representation of ownership in a company or investment fund.
Share Class: Some investment funds and companies offer more than one type or group of shares, each of which is considered a class (e.g., “Class A,” “Advisor” or Institutional” shares). For most investment funds each class has different fees and expenses but all of the classes invest in the same pool of securities and share the same investment objectives.
Shareholder: An owner of shares in an investment fund or corporation.
Shareholder-Type Fees: Any fee charged against your investment for purchase and sale, other than the total annual operating expenses.
Small Capitalization (Cap): A reference to either a small company stock or an investment fund that invests in the stocks of small companies.
Small Cap Fund: A fund that invests primarily in small-cap stocks.
Small Cap Stocks: Stocks of companies with a smaller market capitalization. Small caps are often considered to offer more growth potential than large caps and mid caps but with more risk.
Stable Value Fund: An investment fund that seeks to preserve principal, provide consistent returns and liquidity. Stable value funds include collective investment funds sponsored by banks or trust companies or contracts issued by insurance companies.
Standard & Poor’s 500 Stock Index (S&P 500): An index comprised of 500 widely held common stocks considered to be representative of the U.S. stock market in general. The S&P 500 is often used as a benchmark for equity fund performance.
Statement of Additional Information (SAI): A document provided as a supplement to a mutual fund prospectus. It contains more detailed information about fund policies, operations, and risks. Also known as a Part B prospectus.
Stock: An instrument that signifies an ownership position in a corporation.
Stock Fund: A fund that invests primarily in stocks.
Stock Symbol: An abbreviation using letters and numbers assigned to securities to identify them. Also see Ticker Symbol.
Summary Prospectus: A short-form prospectus that mutual funds generally may use with investors if they make the long-form prospectus and additional information available online or on paper upon request.
Synthetic Investment Contracts: Individually negotiated investments, these contracts are supported by a portfolio of high-credit-quality fixed income assets and mutual funds as well as the financial strength of the issuing financial institution. Returns earned on the contracts vary with the performance of the underlying fixed income assets and mutual funds. These assets back the contract and are owned by the trustee (for example, Vanguard Fiduciary Trust Company) on behalf of the plan. These contracts are also called “alternative investment contracts.”
T. Rowe Price: T. Rowe Price Group, Inc.
Target Date Fund: A fund designed to provide varying degrees of long-term appreciation and capital preservation based on an investor’s age or target retirement date through a mix of asset classes. The mix changes over time to become less focused on growth and more focused on income. Also known as a “lifecycle fund.”
Target Risk Fund: A fund that maintains a predetermined asset mix and generally uses words such as “conservative,” “moderate,” or “aggressive” in its name to indicate the fund’s risk level. Often used interchangeably with “lifestyle fund.”
Ticker Symbol: An abbreviation using letters and numbers assigned to securities and indexes to identify them. Also see Stock Symbol.
Time Horizon: The amount of time that an investor expects to hold an investment before taking money out.
Total Annual Operating Expenses: A measure of what it costs to operate an investment, expressed as a percentage of its assets, as a dollar amount, or in basis points. These are costs the investor pays through a reduction in the investment’s rate of return. See Expense Ratio and Operating Expenses.
Total Return: The change in the net asset value of an investment, assuming reinvestment of all dividend and capital gain distributions.
Traditional Investment Contracts: Individually negotiated investments, the terms of which specify liquidity, yield, interest payments, and maturity (return of principal). These contracts are direct obligations of the issuing financial institutions and are backed only by the financial strength of the issuer.
Trustee: A person or entity (e.g., bank, trust company, or other organization) that is responsible for the holding and safekeeping of trust assets. A trustee may also have other duties such as investment management. A trustee that is a “directed trustee” is responsible for the safekeeping of trust assets but has no discretionary investment management duties or authority over the assets.
Unit: A representation of ownership in an investment that does not issue shares. Most collective investment funds are divided into units instead of shares. See Share.
Unitholder: An owner of units in an investment. See Shareholder.
Unit Class: Investment funds that are divided into units (e.g., collective investment funds) instead of shares may offer more than one type or group of units, each of which is considered a class (e.g., “Class A”). For most investment funds, each class has different fees and expenses but all of the classes invest in the same pool of securities and share the same investment objectives.
Unit Value: The dollar value of each unit on a given date.
U.S. Treasury Securities: Debt securities issued by the United States government and secured by its full faith and credit. Treasury securities are the debt financing instruments of the United States Federal government, and they are often referred to simply as Treasuries.
Value Fund: A fund that invests primarily in stocks that are believed to be priced below what they are really worth.
Vanguard: The Vanguard Group, Inc. and Vanguard Fiduciary Trust Company.
Variable Return Investment: Investments for which the return is not fixed. This term includes stock and bond funds as well as investments that seek to preserve principal but do not guarantee a particular return, e.g., money market funds and stable value funds.
Volatility: Refers to the amount of uncertainty or risk in a security’s value. The possibility the price of the security can change over a short time period in either direction. A lower volatility means that a security’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time. One measure of the relative volatility of a particular stock to the market is its beta.
Yield: The value of interest or dividend payments from an investment, usually stated as a percentage of the investment price.