Glossary: M

Management company – The entity within a mutual fund complex responsible for the investment of the fund’s portfolio and/or the administration of the fund. It is compensated on a percentage of the fund’s total assets.

Management expense ratio – A measure of the total costs of operating a fund as a percentage of average total assets.

Management fee – The sum paid to the investment company’s adviser or manager for supervising its portfolio and administering its operations.

Margin – An investor’s equity in the securities in his or her account. The margin purchaser puts up a portion of the value of the securities, borrowing the remainder from the investment dealer.

Marginal tax rate – The rate of tax on the last dollar of taxable income.

Market index – A vehicle used to denote trends in securities markets. The most popular in Canada is the Toronto Stock Exchange 300 Composite Index (TSE 300).

Market price – In the case of a security, market price is usually considered the last reported price at which the stock or bond is sold.

Maturity – The date at which a loan or bond or debenture comes due and must be redeemed or paid off.

Money market – A sector of the capital market where short term obligations such as Treasury bills, commercial paper and bankers’ acceptances are bought and sold.

Money market fund – A type of mutual fund that invests primarily in treasury bills and other low-risk, short-term investments.

Money purchase pension plan – Another term for defined contribution pension plan.

Mortgage fund – A mutual fund that invests in mortgages. Portfolios of mortgage funds usually consist of first mortgages on Canadian residential property, although some funds alsoinvest in commercial mortgages.

Mortgage-backed securities – Certificates that represent ownership in a pool of mortgages. The holders of these securities receive regular payments of principal and interest.

Mutual fund – An investment entity that pools shareholder or unitholder funds and invests in various securities. The units or shares are redeemable by the fund on demand by the investor. The value of the underlying assets of the fund influences the current price of units.