voluntary accumulation plan

(redirected from Contractual Plans)

Voluntary accumulation plan

Arrangement allowing shareholders of a mutual fund to purchase shares over a period of time on a regular basis, and in so doing take advantage of dollar cost averaging.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Voluntary Accumulation Plan

An investment strategy in which shareholders of a mutual fund to buy more and more shares in the fund on a regular basis. It especially refers to situations in which a shareholder puts in a fixed amount of money on a regular basis, regardless of how many shares that amount buys. Generally speaking, this lowers the average price one pays per share. Thus, if one buys using a voluntary accumulation plan and later sells all shares at once, this could result in a higher profit. It is also called a contractual plan.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

voluntary accumulation plan

A plan to acquire additional shares in a mutual fund on a more or less regular basis, at the discretion of the shareholder.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
"One exciting development, which will help advisory firms who want their perception to improve, is that the demand from UAE residents for more transparency will soon be addressed as the Insurance Authority, which regulates insurance brokers, has introduced draft regulations which proposes a cap on commissions for lump sum investments and fixed-term contractual plans.
Sillitoe said in the case of insurance brokers, the Insurance Authority has introduced draft regulations which proposes a cap on commissions for lump sum investments and fixed-term contractual plans.
For these hospitals, the Contractual Plans, Medicaid, and Commercial Insurance CMIs load highly on the first factor.
As in our previous analyses, Workmen's Compensation and Other Government Insurance exhibit the lowest factor loadings, while the Commercial Insurance and Contractual Plan loadings exhibit the highest weights.
Known as contractual plans, they expect the service member to make payments for set periods (such as 15 years), with 50 percent of the first year's payments representing a sales charge paid to the selling broker-dealer.
The Securities and Exchange Commission, he said, asked Congress to ban products known as "contractual plans," but lawmakers did not act.
The ABCs of Mutual Funds explains precisely how mutual funds, contractual plans, hedge funds, exchange traded funds, folios, unit investment trusts, and variable annuities work, as well as the differences between full service and discount dealers, the legal obligations of stockbrokers, and much more.
In fact, a part of the Investment Company Act of 1940 that was amended in 1970 specifically provides for contractual plans. "Collecting a sales charge in the beginning pays an adviser to educate a prospect," he said.
Contractual plans especially make "great sense" for members of the military, Cozby said.
Although potentially providing returns equivalent to other products if steady payments are made over a long period, these contractual plans proved more expensive to most military purchasers than other widely available alternative products because many military members stopped making payments in the first few years.
The bill also would require insurance agents selling products on military bases to disclose that subsidized coverage might be available from the federal government, and it would ban outright the sale of mutual fund contractual plans.