From 11:00PM PDT on Friday, July 1 until 5:00AM PDT on Saturday, July 2, the Shmoop engineering elves will be making tweaks and improvements to the site. That means Shmoop will be unavailable for use during that time. Thanks for your patience!
We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

75-5-10 Rule

Definition:

"75! 5! 10!" isn't what a quarterback screams to signal a roll out pass.

Instead, the term refers to a formula investment managers use to market or advertise their funds: To legally be able to say that their fund is diversified, managers must follow the 75-5-10 Rule. That means their fund needs to have 75% invested in securities from other issuers and can only have 5% (or less) of the fund's assets sunk into one company. The "10" in this rule refers to the fact that the fund can't own more than 10% of any one issuer's outstanding securities. So no buying up 30% of Google stock and sticking that in the fund.