- Our Company|
- Investor Education|
Alpha measures the difference between a fund's actual returns and its expected returns given its risk level as measured by its beta. A positive alpha figure indicates the fund has performed better than its beta would predict. In contrast, a negative alpha indicates a fund has underperformed, given the expectations established by the fund's beta. Some investors see alpha as a measurement of the value added or subtracted by a fund's manager.
The percentage increase or decrease of a portfolio's share price or NAV over a given time period, with net income (dividends) reinvested. Annualised means the figure shown represents the average amount at which capital has compounded each year for the relevant period. The fund's performance is usually benchmarked against either a relevant index or sector.
An estimate of how much a bond fund's share price will fluctuate in response to a change in interest rates. To see how the price could shift, multiply the fund's duration by the change in rates. If interest rates rise by one percentage point, the share price of a fund with an average duration of five years would decline by about 5%. If rates decrease by a percentage point, the fund's share price would rise by 5%.
A weighted average of all the maturities of the bonds in a portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security.
Average weighted coupon
The average interest rate paid on the bonds held by a fund. It is expressed as a percentage of the stated maturity value of its bonds.
An unmanaged group of securities whose overall performance is used as a standard to measure investment performance.
A measure of the magnitude of a portfolio's past share-price fluctuations in relation to the ups and downs of the overall market (or appropriate market index). The market (or index) is assigned a beta of 1.00, so a portfolio with a beta of 1.20 would have seen its share price rise or fall by 12% when the overall market rose or fell by 10%.
A debt security (IOU) issued by a corporation, government or government agency in exchange for the money the bondholder lends it. In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date.
A measure of a bond issuer's ability to repay interest and principal in a timely manner.
The percentage increase or decrease of a portfolio's share price or NAV over a given time period, with net income (dividends) reinvested. The fund's performance is usually benchmarked against either a relevant index or sector.
Debt to capital
Indicates the percentage that debt comprises of total capital; calculated by dividing each underlying fund holding's total debt by total capital. A large debt/capital ratio indicates that a company is highly leveraged.
Discrete Annual Performance
The percentage increase or decrease of a portfolio's share price or NAV over a complete 12 month period, with net income (dividends) reinvested. The fund's performance is usually benchmarked against either a relevant index or sector.
The strategy of investing in different asset classes and among the securities of many issuers in an attempt to lower overall investment risk.
A payment of cash or stock from a company's earnings to each shareholder as declared by the company's board of directors.
A measure of the sensitivity of bond and bond mutual fund prices to interest rate movements. For example, if a bond has a duration of two years, its price would fall about 2% when interest rates rose one percentage point. On the other hand, the bond's price would rise by about 2% when interest rates fell by one percentage point.
The average annual rate of growth in earnings over an indicated period of years for the stocks now in a fund.
Those countries that were not members of the Organisation for Economic Co-operation and Development (OECD) on 1 January 1995 and, in addition, Mexico and Turkey.
Emerging markets fund
A fund that invests primarily in countries with developing economies (that is, those that are becoming industrialised). Emerging markets funds tend to be more volatile than domestic stock funds due to currency fluctuation and political instability.
In investing, ownership in a company. Often used as a synonym for stock.
The rating employed by such other Rating Agency which is equivalent to the relevant rating by S&P or Moody's.
The percentage of a portfolio's average net assets used to pay its annual expenses.
Frontier market countries are typically smaller, less developed and less accessible emerging markets countries, but with “investable” equity markets. They can offer high, long term returns and low correlations with other markets, but investors should be aware of higher potential risks than mare developed markets, including liquidity, volatility and political risks.
Group of Seven - France, the United States of America, the United Kingdom, Germany, Japan, Italy and Canada
Growth and Income fund
A fund that seeks long-term growth of capital and current dividend income from stocks.
A mutual fund that emphasises stocks of companies believed to offer above-average prospects for capital growth due to their strong earnings and revenue potential. Growth stocks tend to offer relatively low dividend yields, because these companies prefer to reinvest earnings in the company.
A fund that seeks current income rather than growth of capital. Income funds typically invest in bonds and/or high-yielding stocks.
The possibility that a portfolio's dividends will decline as a result of falling interest rates. Income risk is generally higher for money market instruments and short-term bonds, and lower for long-term bonds.
A passively managed mutual fund that seeks to parallel the performance of a particular market index.
A low-cost investment strategy that seeks to match, rather than outperform, the return and risk characteristics of an index, by holding all securities that make up the index or a statistically representative sample of the index. Also known as passive management.
A general rise in the prices of goods and services.
The possibility that increases in the cost of living will reduce or eliminate the returns on a particular investment.
In investing terminology, the ratio of expected return to risk. Usually, this statistical technique is used to measure a manager's performance against a benchmark. This measure explicitly relates the degree by which an Investment has beaten the Benchmark to the consistency by which the Investment has beaten the Benchmark.
The amount charged for borrowing money.
The countries of Central and South America (including Mexico, but excluding the Caribbean countries).
A determination of a company's value, calculated by multiplying the total number of company stock shares outstanding by the price per share. Also called capitalisation.
The possibility that stock or bond prices overall will decline over short or even extended periods. Stock and bond markets tend to move in cycles, with periods of rising prices and periods of falling prices.
The date when the issuer of a money market instrument or bond agrees to repay the principal, or face value, to the buyer.
Member state of the European Union, that is Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.
Net Asset Value (NAV)
The total value of the portfolio at any one time, including all shares and cash, divided by the number of shares in issue.
The securities of a fund.
Price-to-Book ratio (P/B)
The price per share of a stock divided by its book value (i.e., net worth) per share. For a portfolio, the ratio is the weighted average price/book ratio of the stocks it holds.
Supplements price/earnings ratio as a measure of relative value; represents a weighted average of the price/cash flow ratios for the underlying fund holdings.
Price/Earnings ratio (P/E)
The share price of a stock, divided by its per-share earnings over the past year. For a portfolio, the weighted average P/E ratio of the stocks in the portfolio. P/E is a good indicator of market expectations about a company's prospects; the higher the P/E, the greater the expectations for a company's future growth in earnings.
A legal document that gives prospective investors information about an investment, including discussions of its investment objectives and policies, risks, costs, and past performance.
A measure of how much of a portfolio's performance can be explained by the returns from the overall market (or a benchmark index). If a portfolio's total return precisely matched that of the overall market or benchmark, its R-squared would be 1.00. If a portfolio's return bore no relationship to the market's returns, its R-squared would be 0.
Return on assets
Measures profitability by reporting the percentage earned on assets; calculated by dividing 12 months of net income by total assets.
Return on equity
An amount, expressed as a percentage, earned on a company's common stock investment for a specific time frame. This figure tells shareholders how effectively their money is being utilised.
An investor's ability or willingness to endure declines in the prices of investments while waiting for them to increase in value.
A group of companies, often related to a particular industry that have certain shared characteristics.
Stocks, bonds, money market instruments, and other investment vehicles.
A measure of risk-adjusted return. To calculate a Sharpe ratio, an asset's excess returns (its return in excess of the return generated by risk-free assets such as Treasury bills) are divided by the asset's standard deviation.
A debt obligation of any government, including political sub-divisions, local authorities, government agencies, government-owned, controlled, sponsored or guaranteed corporations and supra-nationals.
A measure of the degree to which a fund's return varies from its previous returns or from the average of all similar funds. The larger the standard deviation, the greater the likelihood (and risk) that a security's performance will fluctuate from the average return.
A security that represents part ownership, or equity, in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits, some of which could be paid out as dividends.
The degree of fluctuation in the value of a security, mutual fund, or index, volatility is often expressed as a mathematical measure such as a standard deviation or beta. The greater a fund's volatility, the wider the fluctuations between its high and low prices.
A snapshot of interest and dividend income from a fund. The yield, expressed as a percentage of the fund's net asset value, is based on income earned over the past 30 days and is annualised for the coming year.
For a fixed income fund, this reflects the amounts that may be expected to be distributed over the next 12 months as a percentage of the midmarket unit price of the fund. It does not include any preliminary charge and investors may be subject to tax on distributions.
For an equity fund, this reflects the amounts that may be expected to be distributed over the next 12 months as a percentage of the midmarket unit price of the fund. It does not include any preliminary charge and investors may be subject to tax on distributions.
Yield to call
The rate of return an investor would receive if the securities held by a portfolio were held until their call dates. This yield is valid only if the securities are called prior to maturity.
Yield to maturity
The rate of return an investor would receive if the securities held by a portfolio were held to their maturity dates.
Yield to worst
The bond yield computed by using the lower of either the yield to maturity or the yield to call on every bond.