Glossary

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Capital Gains Distribution. Derived from profits earned by the sale of stocks and bonds in a portfolio, capital gains distributions are passed from the Fund to its unitholders.

Cash Equivalent. A type of asset that can be quickly converted to cash, including Treasury bills and short-term commercial paper.

Closed-End Fund. A mutual fund that issues a fixed number of units. These units are usually bought and sold on stock exchanges and market supply and demand forces determine their value.

Common Stock. A type of security that represents an ownership share in a corporation. Owners of common shares are typically entitled to receive voting rights and dividends. These securities generally have the greatest potential for capital appreciation, but their rights are subordinated in the event of a liquidation or bankruptcy.

Compounding. An important investment principle, this is the process of earning income on income already earned.

Capital Distribution. This is the portion of a distribution that is comprised of capital gains realized in the Fund.

Contingent Beneficiaries. Beneficiaries are entitled to receive death benefits in the event there are no eligible primary beneficiaries for the contract.

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