A specialized investment company that designs a portfolio of assets and sells fractional undivided interests to the public. The interests are commonly referred to as shares and the portfolio may consist of equities, bonds, options and other securities.

Debt obligations issued by states, cities, counties and other government entities to build projects for public use, such as schools, highways and hospitals. Income from municipal bonds may be exempt from certain taxes.

Securities issued by institutions related to the federal government and by U.S. government sponsored enterprises (GSE). Agency debt was created to reduce borrowing costs for different sectors of the economy, such as housing, student loans and agriculture.

Preferred stock represents ownership in a company, with the added benefit of having priority claim to the company’s dividends. They offer a stable, fixed rate of return and usually trade in the open market.

Collateralized Mortgage Obligations — bonds structured from pooled groups of home loan mortgages issued by government agencies such as Fannie Mae, Freddie Mac and Ginnie Mae. CMO’s offer greater flexibility in interest rates and maturities than the direct obligation mortgage pools.

An investment company that pools money from individual and institutional investors to purchase a variety of securities. The securities form a fund that offers diversification and professional management for a yearly fee. Shares are priced based on the net asset value (NAV) of the securities within the fund. The fund continually offers new shares and buys existing shares upon request from shareholders.