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In a dual purpose fund, a share that is entitled to a portion of a firm's ordinary income. Dual purpose funds issue two types of shares: income shares and capital shares, which are entitled to appreciation on the firm's investments. A dual purpose fund has the advantage of allowing shareholders to choose which shares in which to invest (according to their investment goals) without the difficulty of changing investment vehicles. An income share carries lower risk than a capital share.
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One of the two types of stock issued by a dual purpose fund in which the owner is entitled to all the income earned by the portfolio plus the return of the stock's par value (if sufficient funds remain) at the time the fund dissolves. These shares appeal mainly to investors seeking high current income since the chance for capital gain is negligible. Compare capital shares.
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.