Temporary New Account

AAA

DEFINITION of 'Temporary New Account'

An account that is set up within a fund to hold a balance as a result of a significant cash inflow or outflow to a fund. The account is set up to hold these funds temporarily until they can be distributed to unit holders, used to acquire additional assets for the fund or for other large fund expenditures.

INVESTOPEDIA EXPLAINS 'Temporary New Account'

Temporary new accounts are set up by funds in order to help streamline and simplify the accounting and cash flow process. By setting up separate accounts, a fund can easily determine the amount of money that is going to be distributed to unit holders, or roughly the amount of money it will use to purchase additional holdings for the fund.

RELATED TERMS
  1. Hedge Fund

    An aggressively managed portfolio of investments that uses advanced ...
  2. Pension Fund

    A fund established by an employer to facilitate and organize ...
  3. Sector Fund

    A stock mutual, exchange-traded or closed-end fund that invests ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  5. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  6. Warren Buffett

    Known as "the Oracle of Omaha", Buffett is Chairman of Berkshire ...
RELATED FAQS
  1. What is a mutual fund's NAV?

    Net asset value (NAV) represents a fund's per share market value. This is the price at which investors buy ("bid price") ...
  2. When my mutual fund declares an income distribution, the fund price falls by a similar ...

    An income distribution from a mutual fund to its shareholders can take two forms: A shareholder can elect to be paid ...
Related Articles
  1. Retirement

    The Rise Of The Hedged Mutual Fund

    Discover these growing funds, which were previously unavailable to the average investor.
  2. Investing

    What's a Debit Note?

    A debit note is a document used by a seller to inform a purchaser of a dollar amount owed. As the name indicates, it is a note from the seller that a debit has been made to the purchaser’s account. ...
  3. Investing

    What's Capitalization?

    Capitalization has different meanings depending on the context.
  4. Investing

    Is the Best Plan for Pot Investing 'Wait-and-see?'

    Legalized marijuana is an emerging industry and those interested in investing in it should proceed with caution.
  5. Active Trading Fundamentals

    20 Rules To Trade More Professionally

    Break free from the pack and join the professional minority with an approach that raises your odds for long term prosperity.
  6. Investing

    Is Caterpillar Here To Stay?

    Because Caterpillar is the largest construction and mining equipment manufacturer in the world, investors can count on it to keep paying dividends.
  7. Investing

    Is J.C. Penney Fighting An Uphill Battle?

    J.C. Penney's revenue is once again on the ascent, its free cash flow is closing in on positive territory, and its gross margin has rebounded sharply.
  8. Investing

    What Is The Real Picture Of Linn Energy?

    Numbers don't always tell the full story. Take, for example, the long-term chart for LINN Energy which was expected to be down more than 40%.
  9. Bonds & Fixed Income

    Figuring Out How To Cover Your Liability Bases

    Whenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.
  10. Investing

    Hedged ETFs That Help You Cushion Currency Impact

    If you’re an investor holding non-U.S. assets, the returns on your investments will be affected when you translate your investment from its local currency

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center