contractual plan

Contractual plan

A plan in which fixed dollar amounts of mutual fund shares are purchased through periodic investments, usually featuring some sort of additional incentive for the fixed period payments.
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

contractual plan

A program in which an investor in a mutual fund agrees to invest a fixed amount of money at regular intervals in accumulating shares. For example, an individual may contract to invest $100 per month with a selected fund regardless of what the market does or at what price the fund's shares sell throughout the period. See also dollar-cost averaging, load spread option.
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 ?
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.
This initiative underpins the efforts made by local, national and Community authorities under the Contractual Plan concluded between the State and the Guadeloupe Region and the 2000-2006 Single Programming Document (SPD), the main thrust of which is to promote enterprise development.
And players who have been born and played all their rugby in England, are another category who have to be fitted into the complicated contractual plan.
"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.
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.