Voluntary Accumulation Plan

DEFINITION of 'Voluntary Accumulation Plan'

An investment method in which a retail investor periodically invests (at its discretion) relatively small amounts of funds into a mutual fund, building a large position over an extended period.

BREAKING DOWN 'Voluntary Accumulation Plan'

By investing savings into a mutual fund gradually over time with a voluntary accumulation plan, an investor can build a large investment at his or her own pace. Contributions are voluntary, although common practice is to invest a fixed amount at specified intervals. By spreading the contributions over a period of time, investors reap the benefits of dollar-cost averaging, as the fixed contributions will buy more shares of a mutual fund when its price is low than when it is high.

RELATED TERMS
  1. Additional Voluntary Contribution ...

    An extra allocation of funds to a retirement savings account ...
  2. Spread-Load Contractual Plan

    A fee-payment structure applicable to mutual funds in which the ...
  3. Closed Fund

    A mutual fund that has been closed - either temporarily or permanently ...
  4. Mutual Fund Yield

    Dividend payments divided by the value of a mutual fund’s shares. ...
  5. Voluntary Termination

    1. An employee's decision to leave a job of his or her own accord. 2. ...
  6. Family Of Funds

    A group of mutual funds offered by one investment or fund company. ...
Related Articles
  1. Retirement

    Dollar-Cost Averaging Pays

    Get the most out of your mutual fund by using this simple but powerful strategy.
  2. Investing

    Advising FAs: Explaining Mutual Funds to a Client

    More than 80 million people, or half of the households in America, invest in mutual funds. No matter what type of investor you are, there is bound to be a mutual fund that fits your style.
  3. Mutual Funds & ETFs

    The Benefits of Picking Mutual Funds Over Individual Stocks

    Learn about the advantages of investing in mutual funds rather than individual stocks, including the benefits of affordability, oversight and diversification.
  4. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
  5. Investing

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  6. Mutual Funds & ETFs

    The Advantages Of Mutual Funds

    Learn how to get diversification, liquidity and professional management at an affordable price.
  7. Mutual Funds & ETFs

    Trading Mutual Funds for a Living: Is It Possible?

    Find out why trading mutual funds for a living isn't your best bet, including how funds discourage short-term trading and which options may better serve you.
  8. Mutual Funds & ETFs

    How Mutual Funds Affect Stock Prices

    Find out how mutual fund trading activity -- and that of other institutional investors -- impacts stock prices, including both short and long-term effects.
  9. Mutual Funds & ETFs

    5 Reasons to Choose Mutual Funds over ETFs

    Discover five reasons to choose mutual funds over ETFs, such as the wide variety of funds available, the higher service quality and the lack of commission fees.
  10. Mutual Funds & ETFs

    Mutual Funds: Different Types Of Funds

    No matter what type of investor you are, there is bound to be a mutual fund that fits your style. According to the last count there are more than 10,000 mutual funds in North America! That means ...
RELATED FAQS
  1. How do I calculate the loan-to-value ratio using Excel?

    Learn what a mutual fund and a money market fund are, and understand the differences between each and how they serve various ... Read Answer >>
  2. How much of a company's stock can a mutual fund own?

    There is no written rule that stipulates how much of a company a mutual fund can own. Instead, there are two major factors ... Read Answer >>
  3. Why do mutual funds require minimum investments?

    Learn how funds usually set minimum investments to keep away small, short-term traders from impacting the cash flow and the ... Read Answer >>
  4. How do I judge a mutual fund's performance?

    Evaluate mutual fund performance utilizing resources such as Morningstar; compare the fund with others in its peer group ... Read Answer >>
  5. How are blue-chip stocks similar to mutual funds and exchange-traded funds (ETFs)?

    Understand the primary differences between making investments in blue-chip stocks, mutual funds and exchange-traded funds ... Read Answer >>
  6. Can you place a stop-loss order on a mutual fund?

    First, remember that a stop-loss order is a limit order placed with a broker to sell a stock when it reaches a certain price. ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center