Guide to Analysing Companies

MSB
See mutual savings bank.
MSCI
See morgan stanley capital international indices.
Municipal bond
A long-term bond with a coupon that is issued in the United
States by a municipality, county or state in order to raise the
money to build roads, schools, hospitals and so on. Like coun-
tries, banks and any other borrowers that are active in the
markets, municipalities are often rated by agencies according to
their financial standing.
Mutual
Something that is owned and run for the mutual benefit of a
group of members. These “members” may be the investors in a
fund (as in a mutual fund) or the depositors in a bank (see
M
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mutual savings bank). The word has given rise to the term
“demutualisation”, which refers to the change of a mutual or-
ganisation into an incorporated one with shareholders. During
the 1980s and 1990s, many of the UK’s building societies
(mutual mortgage lenders) and other mutual finance compa-
nies opted for incorporation.
Mutual fund
An open-ended investment fund that continually issues new
units as it receives money from investors. Similarly, it redeems
units as and when investors wish to sell. The money is invested
in securities by professional managers who receive in return
a management fee (usually between 0.5% and 2% of the value of
the assets invested).
Mutual funds are one of the easiest ways for private in-
vestors to benefit from the skill of a professional manager and
to diversify the risk of investing in the equity or bond
markets. Mutual funds (called unit trusts in the UK) often
specialise in parts of the market (such as smaller companies in
Asia), in the type of securities in which they invest (such as
corporate bonds), or in investment style (such as
growth stocks that aim for capital appreciation).