Allocation Rate


Allocation Rate
The percentage of an investor's initial cash or capital outlay that actually goes toward the final investment. This amount is net of any fees that may be incurred upon initial investment and is effectively the amount that is exposed to the investment.

For example, if a mutual fund carries a 4% front-end load, only 96% of an investor's initial investment will actually be placed into the fund itself, with the rest going to the investment company. The higher the fees, the lower the overall allocation rate will be for the investor.

Management companies, pension managers and the like all charge some percentage fee for their services. More choices usually means higher allocation rates for investors, but buyers must always beware of exorbitantly high load fees or upfront costs for any investment. Stock and bond index funds remain one of, if not the highest, allocation rate vehicles available to investors who do not wish to actively manage their own portfolios.


Investment dictionary. . 2012.

Look at other dictionaries:

  • allocation rate — /ˌælə keɪʃ(ə)n reɪt/ noun the percentage of a payment that is actually invested in a fund after initial charges have been taken into account …   Dictionary of banking and finance

  • Rate–distortion theory — is a major branch of information theory which provides the theoretical foundations for lossy data compression; it addresses the problem of determining the minimal amount of entropy (or information) R that should be communicated over a channel, so …   Wikipedia

  • rate per machine hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead/budgeted machine hours. This rate may not be very useful for managers if overheads do not… …   Accounting dictionary

  • rate per machine hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead budgeted machine hours. This rate may not be very useful for managers if overheads do not… …   Big dictionary of business and management

  • rate per direct labour hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead/budgeted direct labour hours. A different approach to cost allocation is used in activity… …   Accounting dictionary

  • rate per standard hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead/budgeted standard hours. A different basis of cost allocation is used in activity based… …   Accounting dictionary

  • rate per unit — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead/budgeted units. A different basis of cost allocation is used in activity based costing… …   Accounting dictionary

  • rate per direct labour hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead budgeted direct labour hours. A different approach to cost allocation is used in activity… …   Big dictionary of business and management

  • rate per standard hour — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead budgeted standard hours. A different basis of cost allocation is used in activity based… …   Big dictionary of business and management

  • rate per unit — A basis used in absorption costing for absorbing the manufacturing overhead into the cost units produced. The formula is: budgeted manufacturing overhead budgeted units. A different basis of cost allocation is used in activity based costing… …   Big dictionary of business and management