Glossary I

Section I

Ibbotson Style Analysis

The analysis found in Mutual Fund Research is provided by Ibbotson Associates, a highly regarded Chicago-based investment consulting, software, and data products firm, which has developed a proprietary version of style analysis for the purpose of evaluating mutual funds, closed-end funds, and variable annuities.

Ibbotson Style Statistics (Percentage)

Ibbotson style data helps you select mutual funds that will meet your long-term financial goals. Based on the style weights, alpha, and estimated duration, you can characterize a mutual fund's investment style and determine whether the manager has added value relative to an appropriate benchmark.

IDB Industrial Development Bond

Issued by a governmental authority on behalf of a corporation. Generally secured by the corporation, or a lease with the corporation, NOT the issuing municipality.

Immediate or Cancel (IOC)

The term for a buy or sell order that requires that an order be executed immediately, either in part or in its entirety, or be cancelled. This differs from Fill or Kill (FOK) in that an IOC order can have partial executions, while a FOK order must be executed in its entirety. See Also: Fill or Kill.

Impound Account

An account set up and operated by your mortgage lender that holds a portion of your monthly mortgage payments for payment of property taxes and insurance costs. Also known as Escrow Account.

Inception Date

The date a security commenced operations.

Income Funds

An income mutual fund invest in both equity and debt securities, mainly for the purpose of producing current income. These funds typically invest no more than half their assets in stocks. Income can come from a variety of sources, with widely differing risks, and so to achieve their goal of providing current income, funds use a wide variety of investment styles and asset mixes.


A statistical composite that measures changes in the economy or in financial markets. Please contact your Financial Advisor if you would like a copy of the descriptions of all available indexes.

Index Fund

A mutual fund whose objective is to match the performance of an index of publicly traded stocks, such as the Standard & Poor's 500. Since stocks are not actively selected, operating expenses, which generally are passed on to a fund's investors, are much lower than for the average mutual fund.

Initial Investment

The investment made on the beginning date.

Initial Investment Amount

This value is used to determine the sales charge to a mutual fund to use when calculating returns with the effects of applicable sales charges.

Initial Monthly Payment

Upon closing, you will be provided with the monthly mortgage payment for your loan. An escrow analysis is completed after closing and based on the findings (i.e., changes to property taxes and homeowners insurance), the monthly payment could be subject to change. Ask your mortgage representative for an estimate of your PITI before closing.

Initial Public Offering (IPO)

An issue of new stock by a once private company to transform itself into a publicly held one. IPOs are usually done to raise cash for growing young companies that need larger sources of capital than the private sector can provide. The new shares are sold to one or more investment banks, which then sell them to the public.

Interest At Maturity

Interest earned is paid in full at maturity. (There are no semi-annual coupon payments.) This is a feature usually found on short term bonds and notes.

Interest Only Mortgage

A loan program that generally features lower monthly payments than a conventional fixed rate loan. Payments only consist of the interest due, no principal is charged for a specified period of time-usually five to 10 years. After the interest only period, payments include both principal and interest.

Interest Figuration

Current interest Munis are traded with accrued interest. The seller receives interest up to--but not including--the settlement date. The buyer pays that interest, and begins earning interest on the settlement date. Interest on municipal bonds is usually calculated on a 30 / 360 basis.

Intermediate Term Bond

Bond with duration of 2 to 9 years.

Internal Rate of Return (IRR)

The discount rate at which the present value of an investment's future cash flow equals the cost of the investment.


Refers to securities issued by foreign (non-U.S.) corporations.

Inverted Yield Curve

When an investor earns a higher annual yield for a shorter investment, the yield curve is said to be inverted, because its slope is negative--that is, it has a downward rather than an upward slope. An inverted yield curve is a rare occurrence, and (as of publication date) has never occured in the municipal bond market, but has occured in the U.S. Treasury bond market.

Investment Category

The stated purpose or goal of a security's operations. This term often determines the types of investments the security makes, the results expected, and the level of risk with which it is associated.

Investment Earnings

Represents market appreciation/depreciation of your portfolio during the time period being displayed.

Investment Grade

An investment situation in which a firm has a strong balance sheet, considerable capitalization, and continuous dividends, and is recognized as a leader in its industry.

Investment Manager

Professional responsible for your portfolio. The manager has a fiduciary responsibility to manage the assets prudently and choose whether stocks, bonds, cash equivalents, real estate, or some other assets present the best opportunities for profit at any particular time.

Investment Objective mited Tax G.O.

Investment objective is an optional annualized return objective selected by you. In establishing this return objective, you should make sure that it is consistent with your tolerance for risk.

In Force

The length of time an order remains open.

In the Money

When an option's strike price is below the market price of the underlying stock for a call, or is above the market price of the underlying stock for a put.

IO (Interest-Only) Security

In the case of a CMO, an IO tranche is created deliberately to pay investors only interest and not principal. IO securities are priced at a deep discount to the "notional" amount of principal used to calculate the amount of interest due.


Independent School District.

Issue Description

The description of the bond listing title of the issue, name of issuer, coupon and maturity date.To enter an issuer's name for a search, enter some of the first few letters of the issuer's name or enter the entire name.