Our Markets

Mutual Funds

A mutual fund is a form of collective investment scheme which pools funds from numerous investors with a view to investment in stocks, bonds, short-term money market instruments, and/or other securities.

DEF Financial has access to a plethora of products from mutual fund providers. Each product is scrutinized and evaluated with regard to performance, sector allocation and charges.

Recent innovations within mutual funds include ETFs or exchange-traded funds. These allow investors access to markets and classes that, dependent on their location, might ordinarily be unavailable to them.

ETFs are traded throughout the day on stock exchanges but at prices generally approximating the ETF's net asset value. Most ETFs are index funds and track stock market indexes but many shadow the value of commodities like crude oil or precious metals with the benefit to the client of not having to deal with taking delivery or ongoing storage of inventory. There are even ETFs that permit investors to take positions based on their belief that a particular asset class will drop in value.

Source One's consultants are fully conversant with the workings of all the mutual funds we recommend and you can rest assured that any recommendation will be backed by an intimate understanding of the market in which the fund operates.

Stocks

What is a stock?

A stock is a type of security that signifies ownership in a corporation and represents a claim on part of a corporation's assets and earnings. Stocks are also called shares or equities.

There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated.

A holder of stock (a shareholder) has a claim to a part of the corporation's assets and earnings. In other words, a shareholder is an owner of a company. Ownership is determined by the number of shares a person owns relative to the number of outstanding shares. For example, if a company has 1,000 shares of stock outstanding and one person owns 100 shares, that person would own and have claim to 10% of the company's assets.

Stocks form the foundation of nearly every portfolio. Historically, they have outperformed most other investments over the long run. Source One's trading team buy and sell stocks on exchanges around the world for our clients.

Commodities

What is a Commodity?

A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade. Any good exchanged during commerce, which includes goods traded on a commodity exchange.

The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer — a barrel of oil is basically the same product, regardless of the producer. Compare this to, say, electronics, where the quality and features of a given product will be completely different depending on the producer. Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products such as foreign currencies and indexes. Technological advances have also led to new types of commodities being exchanged in the marketplace: for example, cell phone minutes and bandwidth.

The sale and purchase of commodities is usually carried out through futures contracts on exchanges that standardize the quantity and minimum quality of the commodity being traded. For example, the Chicago Board of Trade stipulates that one wheat contract is for 5,000 bushels and also states what grades of wheat (e.g. No. 2 Northern Spring) can be used to satisfy the contract.

Bonds

What is a bond?

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and governments to finance a variety of projects and activities.

Bonds are commonly referred to as fixed-income securities and are one of the three main asset classes, along with stocks and cash equivalents.

The indebted entity (issuer) issues a bond that states the interest rate (coupon) that will be paid and when the loaned funds (bond principal) are to be returned (maturity date). Interest on bonds is usually paid every six months (semi-annually). The main categories of bonds are corporate bonds, municipal bonds, and Treasury bonds, notes and bills, which are collectively referred to as simply "Treasuries".

Two features of a bond — credit quality and duration — are the principal determinants of a bond's interest rate. Bond maturities range from a 90-day Treasury bill to a 30-year government bond. Corporate and municipals are typically in the three to 10-year range.