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.

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.

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.
References in periodicals archive ?
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.
The Commercial Insurance, Contractual Plan and Workmen's Compensation CMIs load highest on the first factor.
With the wide availability of much less costly alternative products, regulators also question the need for contractual plans to continue to be sold.
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.
introduced a bill (HR 5011) that would ban the sale of mutual fund contractual plans outright.
The bill would ban the sale of mutual fund contractual plans and ensure full regulation of life insurance and other financial products sold on military bases.
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.
Contractual plans impose front-end sales loads that can amount to as much as 50o/6 of first-year contributions.