Glossary – Letter M

Major trend

Underlying price trend prevailing in a market despite temporary declines or rallies.

Managed account

This is similar to a discretionary account where a client has given specific written authorization to a partner, director or qualified portfolio manager of an investment dealer to select securities and execute trades, but on a continuing basis and for a fee. Managed accounts can be solicited whereas discretionary accounts are opened as a matter of convenience to clients who are ill or out of the country.

Management Expense Ratio (MER)

The manager’s annual fee for managing and administering the fund, expressed as a percentage of total fund value. Some funds charge additional administrative fees not included in this figure. For full information on management and administrative costs, consult the fund prospectus.

Management fee %

Management fee is the fee paid to the investment company’s advisor or manager for supervising its portfolio, expressed as a percentage of the total assets of the fund.


The illegal practice of buying or selling a security for the purpose of creating a false or misleading appearance of active trading, or for the purpose of raising or depressing the price to induce purchases or sales by others.


The purchase of securities through money loaned from an investment dealer/broker. The client is also charged interest on the money borrowed for margin account securities.

Margin account

A client account where he or she uses credit from the investment dealer to buy a security. The client needs to deposit a “margin” amount with the balance being advanced by the investment dealer against acceptable collateral such as investments. The investment dealer can make a “margin call” and demand that the client deposit more money or securities when the value of the account falls below a certain level. If the client does not meet the margin call, the dealer can sell the securities in the margin account at a possible loss to cover the balance owed. The client is also charged interest on the money borrowed from the investment dealer for the purchase of the securities.

Margin call

A client is notified of a deficit in their margin account where more money must be deposited to cover the deficit. A copy of this notification is sent to the investment representative.

Marginal tax rate

A client is notified of a deficit in their margin account where more money must be deposited to cover the deficit. A copy of this notification is sent to the investment representative.

Market Capitalization Weighted Index

A type of stock market index where the individual components are weighted according to their market capitalization, so that larger components carry a larger percentage weighting. The value of a capitalization-weighted index can be computed by adding up the collective market capitalization of its members and dividing it by the number of securities in the index.

Indices constructed with a market capitalization weight structure are subject to sector drift as money flows in and out of individual stock market sectors.

Market maker

An authorized trader employed by an investment dealer who is required by the applicable self-regulatory organizations to maintain reasonable liquidity in securities markets by making firm bids or offers for one or more designated securities.

Market order

An order placed to buy or sell a security immediately at the best current price.

Market out clause

A clause in an underwriting agreement allowing the underwriter to cancel the agreement without penalty for certain specified reasons, such as the issue becoming unsaleable due to an unexpected change in securities markets, or in the affairs of the company whose securities are being underwritten.

Market price

The most recent price at which a security transaction took place.

Market Regulation Services Inc. (RS)

Now known as IIROC. The self-regulatory organization that oversees equity trading on exchanges and other markets.


Easily bought or sold.

Marketable bond

A Canadian government debt security that is non-cashable prior to maturity, but whose ownership may be transferred from one holder to another on the open market.

Material change

A change in the affairs of a company that is expected to have a significant effect on the market value of its securities share ownership of the company that could affect control, or the acquisition or disposition of any securities in another company. A material change must be reported to the applicable self-regulatory organization.

Materials Sector

These companies are generally producers of raw materials, or manufacturers of materials used by other companies to produce finished products. This includes chemical manufacturers, including industrial and basic chemicals, fertilizers and agricultural chemicals and industrial gases and specialty chemicals, manufacturers of construction materials, metal and glass containers and paper packaging, paper and forest products manufacturers, and mining and metals producers.


The date on which a loan or a bond or debenture comes due and is to be paid off.

Maturity date

The date on which a bond, debenture, GIC or term deposit is due to be repaid.


The mean represents the annualized average monthly return from which the standard deviation is calculated. The mean will not be exactly the same as the annualized trailing, three-year return figure for the same year. (Technically, the mean is an annualized arithmetic average while the total return figure is an annualized geometric average.)

Medium-term bond or debenture

A bond or debenture that matures in more than three years, but less than 10.

Member firm

An investment dealer that owns a seat on a particular stock exchange or is a member of the Investment Dealers Association of Canada.


The act of one company permanently joining another to become one company.

Minority interest

This appears on consolidated financial statements where the parent company’s figures are combined with those of its subsidiaries. Even if the parent company owns less than 100% of a subsidiary’s stock, all of the subsidiary’s assets and liabilities are combined in the consolidated financial statements. To compensate, the part not owned by the parent company is minority interest and is shown as a liability on the balance sheet and deducted in the earnings statement.

Monetary aggregate

An aggregate that measures the quantity of money held by a country’s economic agents. It includes various forms of money or payment instruments grouped according to their degree of liquidity.

Monetary Conditions Index (MCI)

A weighted sum of the changes in the short-term interest rate (the 90-day commercial paper rate) and the exchange rate (as measured by the C-6 index) from a given base period.

Note: The weight of the exchange rate is one-third that of the interest rate, a three per cent change in the exchange rate being roughly equivalent to a one percentage point change (100 basis points) in interest rates. A change in the MCI gives a measure of the degree of tightening or easing in monetary conditions

Monetary policy

A policy followed by the federal government through the Bank of Canada for controlling credit and the money supply in the economy. The policy will vary according to the anti-inflationary or job-creating results the government primarily desires to achieve.

Money market

That part of the capital market in which short-term financial obligations are bought and sold. These include federal government treasury bills, short term Government of Canada bonds, commercial paper, bankers’ acceptances and guaranteed investment certificates. Longer term securities, when their term shortens to three years, are also traded in the money market.

Money Purchase Pension Plan

See Defined Contribution Plan.

Morgan Stanley Capital International Indices (MSCI)

Indices calculated by Morgan Stanley Capital International group (MSCI) which track more than 45 equity markets throughout the world. A key industry standard that most international mutual funds and other international institutional investors measure their performance against.


A contract specifying that certain property is pledged as security for a loan. The money is to be repaid in installments that usually combine principal and interest payments.

Mortgage backed securities

Similar to bonds, these securities are backed by a share in a pool of home mortgages insured under the National Housing Act. The securities pay interest and a part of the principal each month and, if home owners prepay their mortgages, may pay out additional amounts of principal before normal maturity. They trade in the bond market at prices reflecting current interest rates.


A common term for the price-earnings ratio of a company’s shares.

Mutual fund

A pool of money invested for a large number of investors by a professional money manager.

Mutual Fund Dealers Association of Canada (MFDA)

The national self-regulatory organization (SRO) for the distribution side of the Canadian mutual fund industry. The MFDA regulates the operations, standards of practice and business conduct of its members and their representatives.

Mutual funds

These are open-end funds that are not listed for trading on a stock exchange and are issued by companies which use their capital to invest in other companies. Mutual funds sell their own new shares to investors and buy back their old shares upon redemption. Capitalization is not fixed and normally shares are issued as people want them.