GLOSSARY
60/40 PORTFOLIO
A portfolio composed of 60% Equities / 40% Bonds.
Accommodative monetary policy
Strategy used by a Central Bank to stimulate economic growth by lowering interest rates. It aims to facilitate borrowing and to increase the money supply.
Active investment strategy
A strategy where the portfolio manager makes proactive investments with the goal of outperforming a passive benchmark index.
Active share
Measures the percentage of holdings in a portfolio that are different from the benchmark it tracks.
Active weight
The difference in size of an allocation to a security between a portfolio and benchmark.
Activist investing
Group or individual that buys a large number of public company’s shares in order to try to acquist a number of seats on the company’s board with the aim of making change in the company.
Adjusted funds from operations (AFFO)
Adjusted funds from operations (AFFO) is a financial measure used to estimate the value of a real estate investment trust (REIT).
Agency mortgage backed security (AMBS)
An Agency Mortgage-Backed Security (AMBS) issued by one of three quasi-governmental agencies: Government National Mortgage Association (GNMA or Ginnie Mae), Federal National Mortgage Association (FNMA or Fannie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac).
Aggregate demand
Total demand for a good/service within a market.
AGTECH
Acronym used for ‘agricultural technology’.
Alerian MLP index TR USD
The Alerian MLP Index TR (AMZX) is the leading gauge of large- and mid-cap energy Master Limited Partnerships (MLPs). The float-adjusted, capitalization-weighted index is calculated on a total-return basis, includes 50 prominent companies and captures approximately 75% of available market capitalization.
All cap
Often referred to when an investment fund invests in a broad universe of equity securities with no market capitalisation restraints.
Alpha
A measure of investment performance relative to a risk-adjusted benchmark performance.
Alternative asset
Assets that are not stocks, bonds and cash such as private equity or real estate.
Alternative credit
Non-bank lending such as direct lending from investment funds or individuals
American Depositary Receipt (ADR)
A certificate issued by a U.S. Bank representing shares in a foreign company that trades on a U.S exchange.
Alternative Investments
A financial asset that does not categorise as a conventional investment such as stocks, bonds etc. Instead they are often complex in nature with a high degree of risk. For example, private equity, venture capital and hedge funds.
Annual percentage rate (APR)
The annual rate that is charged for borrowing, or earned on an investment.
Annual report
A comprehensive report intended to provide information about a company’s activities and financial performance throughout the preceding year.
Annualized return
A rate or return that is recalculated to show it as an annual rate.
Arbitrage
A process of exploiting price differences between two or more assets by simultaneously buying and selling it.
Article 6 fund
Within the Sustainable Finance Disclosure Regulation (“SFDR”), an Article 6 fund, also referred to as “grey fund”, refers to a fund that either considers ESG risks as part of the investment process or that is explicitly declared as non-sustainable.
Article 8 fund
Within the Sustainable Finance Disclosure Regulation (“SFDR”), an Article 8 fund, also referred to as “light green fund”, refers to a fund that promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices.
Asset allocation
The process of dividing investments among different kinds of assets, such as stocks, bonds, real estate and cash, to optimize the risk/reward tradeoff based on the investors specific situation and goals.
Asset backed lending
Lending of money where the payback of the loan is guaranteed solely by the assets pledged as collateral for the specific loan.
Asset class
A group of securities with similar characteristics that tend to behave similarly in the marketspace, such as equities, bonds and cash equivalents.
Asset-intensive business
A company that operates in an industry that requires high levels of capital in order to operate, such as airports or mining.
Asset light strategy
A company that has relatively few capital assets compared to its operations.
Assets under management (AUM)
The total market value of all assets a financial institution or fund manages on behalf of its clients.
Asymmetric payoff profile
A set of investment outcomes where the potential for profit is higher than the potential for loss.
Asymmetric risk/reward
A situation where the risk of an investment is proportionality greater or less than the potential gain.
Average selling price
The price at which a certain product or service is typically sold for.