{"id":14846,"date":"2025-10-27T11:37:43","date_gmt":"2025-10-27T10:37:43","guid":{"rendered":"https:\/\/www.imgp.com\/?page_id=14846"},"modified":"2025-11-21T07:55:28","modified_gmt":"2025-11-21T06:55:28","slug":"industry-terms-and-definitions","status":"publish","type":"page","link":"https:\/\/www.imgp.com\/us\/industry-terms-and-definitions\/","title":{"rendered":"Industry Terms and Definitions"},"content":{"rendered":"
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Industry Terms and Definitions<\/span><\/h1>\n\n<\/div>\n\t\t\n\t <\/section>\n\n\n
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Active Share<\/strong>
Active Share measures the degree of difference between a fund portfolio and its benchmark index.<\/p>\n\n\n\n

ADTV<\/strong>
Average daily trading volume (ADTV) is a metric used in trading to assess the liquidity and activity level of a security, such as a stock, bond, or commodity. It represents the average number of shares or contracts traded over a specific period, typically measured on a daily basis.<\/p>\n\n\n\n

Alpha<\/strong>
Alpha is an annualized return measure of how much better or worse a fund\u2019s performance is relative to an index of funds in the same category, after allowing for differences in risk.<\/p>\n\n\n\n

Alt-A, or Alternative A-paper<\/strong>
Alt-A, or Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or \u201cprime\u201d, and less risky than \u201csubprime,\u201d the riskiest category.<\/p>\n\n\n\n

Basel II Accords<\/strong>
Basel II is the second of the Basel Accords, which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision. The purpose of Basel II is to create an international standard that banking regulators can use when creating regulations about how much capital banks need to put aside to guard against the types of financial and operational risks banks face.<\/p>\n\n\n\n

Asset-backed security (ABS)<\/strong>
Asset-backed security (ABS) is a financial security collateralized by a pool of assets such as loans, leases, credit card debt, royalties or receivables.<\/p>\n\n\n\n

Basis Point<\/strong>
A basis point is a value equaling one one-hundredth of a percent (1\/100 of 1%).<\/p>\n\n\n\n

Beta<\/strong>
Beta <\/strong>measures the sensitivity of rates of return on a fund to general market movements.<\/p>\n\n\n\n

Beta <\/strong>measures the volatility of the fund, as compared to that of the overall market. The Market\u2019s beta is set at 1.00; a beta higher than 1.00 is considered to be more volatile than the market, while a beta lower than 1.00 is considered to be less volatile.<\/p>\n\n\n\n

Black Scholes model<\/strong>
The Black Scholes model is a model of price variation over time of financial instruments such as stocks that can, among other things, be used to determine the price of a European call option.<\/p>\n\n\n\n

Book value<\/strong>
Book value is the net asset value of a company, calculated by subtracting total liabilities from total assets.<\/p>\n\n\n\n

Brexit<\/strong>
Brexit is an abbreviation of \u201cBritish exit\u201d, which refers to the June 23, 2016 referendum by British voters to exit the European Union.<\/p>\n\n\n\n

Business development company (BDC)<\/strong>
Business development company (BDC) is an organization that invests in and helps small- and medium-size companies grow in the initial stages of their development.<\/p>\n\n\n\n

CAGR<\/strong>
CAGR stands for the Compound Annual Growth Rate. It is the measure of an investment\u2019s annual growth rate over time, with the effect of compounding taken into account. It is often used to measure and compare the past performance of investments, or to project their expected future returns.<\/p>\n\n\n\n

Cap Rate<\/strong>
Capitalization rate (or \u201ccap rate\u201d) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.<\/p>\n\n\n\n

Cash flow<\/strong>
Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g., depreciation) and interest expense to pretax income.<\/p>\n\n\n\n

Cash-on-Cash Return<\/strong>
Cash-on-cash return is a method of yield computation used for investments lacking an active secondary market, such as limited partnerships.<\/p>\n\n\n\n

Closed-end fund (CEF)<\/strong>
Closed-end fund (CEF) is a publically traded, pooled investment fund with a manager overseeing the portfolio. It is then structured, listed, and traded like a stock on a stock exchange.<\/p>\n\n\n\n

Collateralized Loan Obligation (CLO)<\/strong>
Collateralized Loan Obligation (CLO) is a security backed by a pool of debt, often low-rated corporate loans. Collateralized loan obligations (CLOs) are similar to collateralized mortgage obligations, except for the different type of underlying loan.<\/p>\n\n\n\n

Collateralized put-write<\/strong>
Collateralized put-write is nn options trading strategy that involves short positions in put options and the use of the underlying stock as collateral.<\/p>\n\n\n\n

Constant Currencies<\/strong>
Constant Currencies is an exchange rate that eliminates the effects of exchange rate fluctuations and that is used when calculating financial performance numbers. Companies with major foreign operations often use constant currencies when calculating their yearly performance measures.<\/p>\n\n\n\n

Contango<\/strong>
Contango is a condition in which distant delivery prices for futures exceed spot (for immediate delivery) prices, often due to the costs of storing and insuring the underlying commodity.<\/p>\n\n\n\n

Convertible security<\/strong>
Convertible security is an investment that can be changed into another form. The most common convertible securities are convertible bonds or convertible preferred stock, which can be changed into equity or common stock.<\/p>\n\n\n\n

Correlation<\/strong>
Correlation is a statistical measure of how two securities move in relation to each other.<\/p>\n\n\n\n

Cost Basis<\/strong>
Cost Basis is the original value of an asset for tax purposes (usually the purchase price), adjusted for stock splits, dividends and return of capital distributions.<\/p>\n\n\n\n

Dark Pools<\/strong>
Dark Pools are private exchanges or forums for trading securities; unlike stock exchanges, dark pools are not accessible by the investing public.<\/p>\n\n\n\n

Debt to Capital Ratio<\/strong>
Debt to capital ratio (D\/C ratio) shows the proportion of a company\u2019s debt to its total capital, which consists of the sum of its debt and equity combined.<\/p>\n\n\n\n

Debt to Equity Ratio<\/strong>
Debt to Equity Ratio is a measure of a company\u2019s financial leverage calculated by dividing its total liabilities by stockholders\u2019 equity. It indicates what proportion of equity and debt the company is using to finance its assets.<\/p>\n\n\n\n

Discounted Cash Flow<\/strong>
Discounted cash flow is calculated by multiplying future cash flows by discount factors to obtain present values.<\/p>\n\n\n\n

Dividend yield<\/strong>
Dividend yield is the return on an investor\u2019s capital investment that a company pays out to its shareholders in the form of dividends. It is calculated by taking the amount of dividends paid per share over the course of a year and dividing by the stock\u2019s price.<\/p>\n\n\n\n

Dollar-cost averaging<\/strong>
Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. The investor purchases more shares when prices are low and fewer shares when prices are high.<\/p>\n\n\n\n

Drawdown<\/strong>
Drawdown is the peak-to-trough decline during a specific record period of an investment, fund or commodity.<\/p>\n\n\n\n

Dry Powder<\/strong>
Dry Powder is a slang term referring to marketable securities that are highly liquid and considered cash-like. It can also refer to cash reserves kept on hand.<\/p>\n\n\n\n

Duration<\/strong>
Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.<\/p>\n\n\n\n

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)<\/strong>
Earnings before interest, taxes, depreciation and amortization is an approximate measure of a company\u2019s operating cash flow based on data from the company\u2019s income statement. Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, and amortization.<\/p>\n\n\n\n

Earnings Growth<\/strong>
Earnings growth is a measure of growth in a company\u2019s net income over a specific period, often one year. The term can apply to actual data from previous periods or estimated data for future periods.<\/p>\n\n\n\n

Earnings per share (EPS)<\/strong>
Earnings per share (EPS) is calculated by taking the total earnings divided by the number of shares outstanding.<\/p>\n\n\n\n

Economic Value Added (EVA)<\/strong>
Economic Value Added (EVA) is an estimate of a firm\u2019s economic profit \u2013 being the value created in excess of the required return of the company\u2019s investors (being shareholders and debt holders). Quite simply, EVA is the profit earned by the firm less the cost of financing the firm\u2019s capital.<\/p>\n\n\n\n

EM<\/strong>
Emerging Markets equities refers to countries or regions undergoing fast economic growth. A formula using a country\u2019s gross domestic product (GDP) and per capita income is often used to determine if a country is an emerging market. These include countries in the Americas, Europe, Africa, Asia and the Middle East.<\/p>\n\n\n\n

Enterprise Value\/Owners\u2019 Earnings (or Free Cash Flow)<\/strong>
Enterprise Value\/Owners\u2019 Earnings (or Free Cash Flow) compares the total valuation of the company with its ability to generate cash flow. It is the inverse of the Free Cash Flow Yield. The lower the ratio of enterprise value to the free cash flow figures, the faster a company can pay back the cost of its acquisition or generate cash to reinvest in its business.<\/p>\n\n\n\n

Enterprise value\/sales multiple<\/strong>
Enterprise value\/sales multiple is measure of a company\u2019s value, often used as an alternative to straightforward market capitalization. EV is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.<\/p>\n\n\n\n

EV\/EBITDA<\/strong>
EV\/EBITDA is a financial ratio that measures a company\u2019s return on investment and is commonly used to compare companies within an industry.<\/p>\n\n\n\n

Ex-ante beta<\/strong>
Ex-ante beta is expected or predicted volatility of a security or portfolio.<\/p>\n\n\n\n

Federal Home Loan Mortgage Corporation (\u201cFreddie Mac\u201d)<\/strong>
Federal Home Loan Mortgage Corporation (\u201cFreddie Mac\u201d): A stockholder-owned, government-sponsored enterprise (GSE) chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing for middle income Americans. The FHLMC purchases, guarantees and securitizes mortgages to form mortgage-backed securities. The mortgage-backed securities that it issues tend to be very liquid and carry a credit rating close to that of U.S. Treasuries.<\/p>\n\n\n\n

Federal National Mortgage Association (\u201cFannie Mae\u201d)<\/strong>
Federal National Mortgage Association (\u201cFannie Mae\u201d): A government-sponsored enterprise (GSE) that was created in 1938 to expand the flow of mortgage money by creating a secondary mortgage market. Fannie Mae is a publicly traded company which operates under a congressional charter that directs Fannie Mae to channel its efforts into increasing the availability and affordability of homeownership for low-, moderate- and middle-income Americans.<\/p>\n\n\n\n

Floating interest rate<\/strong>
Floating interest rate, also known as a variable or adjustable rate, refers to any type of debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the instrument.<\/p>\n\n\n\n

Free Cash Flow<\/strong>
Free cash flow is the amount of cash a company has after expenses, debt service, capital expenditures and dividends.<\/p>\n\n\n\n

Forward Price to Earnings (Forward P\/E)<\/strong>
Forward Price to Earnings (Forward P\/E) is a measure of the price-to-earnings ratio using forecasted earnings for the P\/E calculation.<\/p>\n\n\n\n

Free Cash Flow Yield<\/strong>
Free cash flow yield is an overall return evaluation ratio of a stock, which standardizes the free cash flow per share a company is expected to earn against its market price per share. The ratio is calculated by taking the free cash flow per share divided by the share price.<\/p>\n\n\n\n

Government National Mortgage Association (\u201cGinnie Mae\u201d)<\/strong>
Government National Mortgage Association (\u201cGinnie Mae\u201d): A U.S. government corporation within the U.S. Department of Housing and Urban Development (HUD). Ginnie May aims to ensure liquidity for government-insured mortgages, including those insured by the Federal Housing Administration (FHA), the Veterans Administration (VA) and the Rural Housing Administration (RHA), as well as bring investors\u2019 capital into the market for these types of loans, so that the issuers have the means to issue more. Most of the mortgages securitized as Ginnie Mae mortgage-backed securities (MBSs) are those guaranteed by FHA, which are typically mortgages for first-time home buyers and low-income borrowers.<\/p>\n\n\n\n

Gross Domestic Product (GDP)<\/strong>
Gross Domestic Product (GDP) is the market value of the goods and services produced by labor and property in the United States.<\/p>\n\n\n\n

Gross Merchandise Volume<\/strong>
Gross merchandise volume or GMV is a term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame.<\/p>\n\n\n\n

Growth S-Curve<\/strong>
Growth S-Curve refers to businesses that are characterized by a shallow start, where only early adopters and niche markets buy the product or invest in the company. Then they experience a rapid growth, and the product or business has a dominant position in the market. After the rapid growth, these businesses maintain a high performance level but with little growth, which often signals a mature but saturated market.<\/p>\n\n\n\n

Internal Rate of Return (IRR)<\/strong>
Internal Rate of Return is the discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero.<\/p>\n\n\n\n

Intrinsic Value<\/strong>
Intrinsic Value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.<\/p>\n\n\n\n

Inverse floater<\/strong>
Inverse floater (or inverse floating rate note) is a bond or other type of debt whose coupon rate has an inverse relationship to a benchmark rate.<\/p>\n\n\n\n

Inverse interest-only security<\/strong>
Inverse interest-only security is a security that pays a coupon inversely related to market rates (i.e., it moves in the opposite direction of interest rates), instead of paying a coupon corresponding to the interest payments homeowners (mortgagors) actually make.<\/p>\n\n\n\n

Investment Grade<\/strong>
An Investment Grade bond is a bond with a rating of AAA to BBB; a Below Investment Grade bond is a bond with a rating lower than BBB.<\/p>\n\n\n\n

LIBOR<\/strong>
LIBOR is the London Inter-Bank Offer Rate. This is the interest rate that banks charge each other for loans.<\/p>\n\n\n\n

Loan participation note (LPN)<\/strong>
Loan participation note (LPN) is a fixed-income security that permits investors to buy portions of an outstanding loan or package of loans.<\/p>\n\n\n\n

Long<\/strong>
Investors maintain \u201clong\u201d security positions in the expectation that the stock will rise in value in the future. A \u201clong\u201d position in a security means that you own the security. The opposite of a \u201clong\u201d position is a \u201cshort\u201d position.<\/p>\n\n\n\n

Loss adjusted yields<\/strong>
Loss adjusted yields represent the yield earned after expected losses on a specific mortgage bond, across a variety of scenarios.<\/p>\n\n\n\n

Margin of Safety<\/strong>
Margin of safety is a principle of investing in which an analyst only purchases securities when the market price is below the analyst\u2019s estimation of intrinsic value. It does not guarantee a successful investment.<\/p>\n\n\n\n

Market Cap<\/strong>
Market cap is the market price of an entire company, calculated by multiplying the number of shares outstanding by the price per share.<\/p>\n\n\n\n

Master limited partnership (MLP)<\/strong>
Master limited partnership (MLP) is a type of business venture that exists in the form of a publicly traded limited partnership. It combines the tax benefits of a partnership \u2014 profits are taxed only when investors actually receive distributions \u2014 with the liquidity of a public company.<\/p>\n\n\n\n

Maximum Drawdown<\/strong>
A Maximum Drawdown (MDD) is the maximum loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum Drawdown (MDD) is an indicator of downside risk over a specified time period..<\/p>\n\n\n\n

Mezzanine debt<\/strong>
Mezzanine debt is a type of debt that incorporates equity-based options, such as warrants, with a lower-equity debt. It is actually closer to equity than debt, because the debt is only important in the event of bankruptcy. Mezzanine debt is frequently associated with acquisitions and buyouts where it may be used to prioritize new owners ahead of existing owners in the event of bankruptcy.<\/p>\n\n\n\n

Moonshot Project<\/strong>
Moonshot project is a project or proposal that addresses a huge problem, proposes a radical solution, or uses breakthrough technology<\/p>\n\n\n\n

Morningstar Multi-Alternative Category<\/strong>
The Morningstar Multi-Alternative Category represents the average annual composite performance of all mutual funds listed in the Multi-Alternative Category by Morningstar. Morningstar\u2019s Multi-Alternative Category includes a variety of strategies focused on total return across a broad mandate.<\/p>\n\n\n\n

Mortgage-backed security (MBS)<\/strong>
Mortgage-backed security (MBS) is a type of asset-backed security that is secured by a mortgage or collection of mortgages<\/p>\n\n\n\n

Mortgage real estate investment trusts (mREITs)<\/strong>
Mortgage real estate investment trusts (mREITs) deal in investment and ownership of property mortgages; they loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities.<\/p>\n\n\n\n

Net Debt\/EBITDA<\/strong>
Net Debt\/EBITDA is a measure of a company\u2019s ability to pay off its incurred debt. This ratio gives the investor the approximate amount of time that would be needed to pay off all debt, ignoring the factors of interest, taxes, depreciation and amortization.<\/p>\n\n\n\n

Net operating profit after tax (NOPAT)<\/strong>
Net operating profit after tax (NOPAT) is a company\u2019s potential cash earnings if its capitalization were unleveraged (that is, if it had no debt).<\/p>\n\n\n\n

Net profit<\/strong>
Net profit represents the number of sales dollars remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company\u2019s total revenue.<\/p>\n\n\n\n

Nifty Fifty<\/strong>
Nifty Fifty refers to the 50 stocks that were most favored by institutional investors the 1960s and 1970s. Companies in this group were usually characterized by consistent earnings growth and high P\/E ratios.<\/p>\n\n\n\n

Non-GAAP Earnings<\/strong>
Non-GAAP Earnings is an alternative earnings measure of the performance of a company. Many companies report non-GAAP earnings in addition to the required generally accepted accounting principles (GAAP) earnings, stating that the alternate figure more accurately reflects their company\u2019s performance.<\/p>\n\n\n\n

Non-index-eligible securities<\/strong>
Non-index-eligible securities are securities that are not eligible for inclusion in an index<\/p>\n\n\n\n

Nonperforming Loan<\/strong>
Nonperforming Loan is a sum of borrowed money upon which the debtor has not made his or her scheduled payments for at least 90 days.<\/p>\n\n\n\n

Options<\/strong>
Options are a financial derivative sold by an option writer to an option buyer. The contract offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) the underlying asset at an agreed-upon price during a certain period of time or on a specific date.<\/p>\n\n\n\n

Out of the money (OTM)<\/strong>
Out of the money (OTM) is term used to describe a call option with a strike price that is higher than the market price of the underlying asset, or a put option with a strike price that is lower than the market price of the underlying asset. An out of the money option has no intrinsic value, but only possesses extrinsic or time value.<\/p>\n\n\n\n

Pair-wise correlation<\/strong>
Pair-wise correlation is the average of the correlations of each managers\u2019 performance with each of the other managers on the fund.<\/p>\n\n\n\n

Price to Book (P\/B) Ratio<\/strong>
The Price to book (P\/B) ratio compares a stock\u2019s market value to the value of total assets less total liabilities.<\/p>\n\n\n\n

The Price to book (P\/B) ratio is calculated by dividing the current price of the stock by the company\u2019s book value per share.<\/p>\n\n\n\n


Price to Cash Flow Ratio<\/strong>
The price\/cash flow ratio is a ratio used to compare a company\u2019s market value to its cash flow. It is calculated by dividing the company\u2019s market cap by the company\u2019s operating cash flow in the most recent fiscal year (or the most recent four fiscal quarters); or, equivalently, divide the per-share stock price by the per-share operating cash flow. In theory, the lower a stock\u2019s price\/cash flow ratio is, the better value that stock is.<\/p>\n\n\n\n

Price to Earnings (P\/E) Ratio<\/strong>
The price to earnings (P\/E) ratio <\/strong>reflects the multiple of earnings at which a stock sells.<\/p>\n\n\n\n

The price to earnings (P\/E) ratio<\/strong> is calculated by dividing current price of the stock by the company\u2019s trailing 12 months\u2019 earnings per share.<\/p>\n\n\n\n

Price to earnings ratio<\/strong> is a common tool for comparing the prices of different common stocks and is calculated by dividing the current market price of a stock by the earnings per share.<\/p>\n\n\n\n

The price-earnings ratio (\u201cP\/E\u201d)<\/strong> is the most common measure of how expensive a stock is.<\/p>\n\n\n\n

Synonymous with the term absolute price to earnings (P\/E)<\/strong> ratio.<\/p>\n\n\n\n

Price to Free Cash Flow<\/strong>
Price to free cash flow is a valuation metric that compares a company\u2019s market price to its level of annual free cash flow. This is similar to the valuation measure of price-to-cash flow but uses the stricter measure of free cash flow, which reduces operating cash flow by capital expenditures. This is done as companies need to maintain or expand their asset bases (capital expenditure) to either continue growing or maintain the current levels of free cash flow.<\/p>\n\n\n\n

Price to Sales (P\/S) Ratio<\/strong>
Price to sales (P\/S) ratio is a tool for calculating a stock\u2019s valuation relative to other companies, calculated by dividing a stock\u2019s current price by its revenue per share.<\/p>\n\n\n\n

Price to Value Ratio<\/strong>
Price to Value describes the relationship between the market price of a security and the intrinsic value assigned to that security by an investor.<\/p>\n\n\n\n

Prime<\/strong>
Prime refers to a classification of borrowers, rates, or holdings in the lending market that are considered to be of high quality.<\/p>\n\n\n\n

Private market value<\/strong>
Private market value is the value of a company if each of its parts were independent, publicly traded entities.<\/p>\n\n\n\n

Prospective earnings growth ratio (PEG ratio)<\/strong>
Prospective earnings growth ratio (PEG ratio) is the projected one-year annual growth rate, determined by taking the consensus forecast of next year\u2019s earnings, less this year\u2019s earnings, and dividing the result by this year\u2019s earnings<\/p>\n\n\n\n

Quantitative Easing (QE)<\/strong>
Quantitative Easing (QE) is a monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply.<\/p>\n\n\n\n

Range-bound<\/strong>
Range-bound: When a market, or the value of a particular stock, bond, commodity or currency, moves within a relatively tight range for a certain period of time.<\/p>\n\n\n\n

Return on Enterprise Value (ROEV)<\/strong>
Return on Enterprise Value (ROEV) is a stock valuation ratio that can be useful for comparing the values of different companies. It is simply net cash flow divided by enterprise value.<\/p>\n\n\n\n

Return On Equity<\/strong>
Return on equity measures the rate of return on the ownership interest of the common stock owners equal to a fiscal year\u2019s net income (after preferred stock dividends but before common stock dividends) divided by total equity (excluding preferred shares), expressed as a percentage.<\/p>\n\n\n\n

Return On Invested Capital (ROIC)<\/strong>
Return on invested capital (ROIC) is a calculation used to assess a company\u2019s efficiency at allocating the capital under its control to profitable investments. The return on invested capital measure gives a sense of how well a company is using its money to generate returns.<\/p>\n\n\n\n

Return of Capital<\/strong>
Return of Capital is return from an investment that is not considered income. This is when some or all of the money an investor has in an investment is paid back to them; it is not considered a gain of any type because it is not in excess of the original investment.<\/p>\n\n\n\n

S-Curve<\/strong>
S-Curve businesses are characterized by a shallow start, where only early adopters and niche markets buy the product or invest in the company. Then they experience a rapid growth, and the product or business has a dominant position in the market. After the rapid growth, these businesses maintain a high performance level but with little growth, which often signals a mature but saturated market.<\/p>\n\n\n\n

Sequential Growth<\/strong>
Sequential growth is a measure of a company\u2019s short-term financial performance that compares the results achieved in a recent period to those of the period immediately preceding it.<\/p>\n\n\n\n

Sharpe Ratio<\/strong>
Sharpe Ratio is measure of a fund\u2019s return relative to its risk. The Sharpe ratio uses standard deviation to measure a fund\u2019s risk-adjusted returns. The higher a fund\u2019s Sharpe ratio, the better a fund\u2019s returns have been relative to the risk it has taken on. Because it uses standard deviation, the Sharpe ratio can be used to compare risk-adjusted returns across all fund categories.<\/p>\n\n\n\n

Short<\/strong>
Investors who sell short believe the price of the stock will decrease in value. A \u201cshort\u201d position is generally the sale of a stock you do not own.<\/p>\n\n\n\n

Sortino Ratio<\/strong>
Sortino Ratio is a modification of the Sharpe ratio that differentiates harmful volatility from general volatility by taking into account the standard deviation of negative asset returns, called downside deviation.<\/p>\n\n\n\n

Standard Deviation<\/strong>
Standard deviation is a statistical measure of the historical volatility of a mutual fund or portfolio, usually computed using 36 monthly returns.<\/p>\n\n\n\n

Structured finance<\/strong>
Structured finance is a complex financial instrument offered to borrowers with unique and sophisticated needs.<\/p>\n\n\n\n

Stub Equity<\/strong>
Stub Equity is a stock being sold for a greatly reduced price as a result of serious financial difficulties. Stub equity is considered a risky investment but can offer high payoffs if the company is able to turn around their financials.<\/p>\n\n\n\n

Subprime<\/strong>
Subprime refers to the credit quality of particular borrowers, who have weakened credit histories and a greater risk of loan default than prime borrowers. The market for lenders and borrowers of subprime credit includes the business of subprime mortgages, subprime auto loans and subprime credit cards, as well as various securitization products that use subprime debt as collateral.<\/p>\n\n\n\n

Swap<\/strong>
Swap is, traditionally, the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed.<\/p>\n\n\n\n

Swaption (swap option)<\/strong>
Swaption (swap option) is the option to enter into an interest rate swap. In exchange for an option premium, the buyer gains the right but not the obligation to enter into a specified swap agreement with the issuer on a specified future date.<\/p>\n\n\n\n

Tangible Book Value Per Share<\/strong>
Tangible Book Value Per Share \u2013 TBVPS is a method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets.<\/p>\n\n\n\n

Tier 1 Ratio<\/strong>
Tier 1 Ratio is a comparison between a banking firm\u2019s core equity capital and total risk-weighted assets.<\/p>\n\n\n\n

Treasury Inflation-Protected Securities<\/strong>
Treasury Inflation-Protected Securities, or TIPS, are securities whose principal is tied to the Consumer Price Index (CPI) . The principal increases with inflation and decreases with deflation. When the security matures, the U.S. Treasury pays the original or adjusted principal, whichever is greater. TIPS pay interest every six months.<\/p>\n\n\n\n

Upside\/downside capture<\/strong>
Upside\/downside capture is a statistical measure that shows whether a given fund has outperformed\u2013gained more or lost less than\u2013a broad market benchmark during periods of market strength and weakness, and if so, by how much.<\/p>\n\n\n\n

US<\/strong>
United States (domestic) equities represented by the total US capitalization-weighted equity market.<\/p>\n\n\n\n

VIX: Chicago Board Options Exchange (CBOE) Volatility Index<\/strong>
VIX Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market\u2019s expectation of 30 day volatility. The Index is constructed using the implied volatility of a wide range of S&P 500 Index Options.<\/p>\n\n\n\n

West Texas Intermediate (WTI)<\/strong>
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing.<\/p>\n\n\n\n

Yield Curve<\/strong>
Yield Curve: A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. The curve is used to predict changes in economic output and growth.<\/p>\n\n\n\n

Yield to Maturity<\/strong>
Yield to Maturity is the rate of return anticipated on a bond if it is held until the maturity date.<\/p>\n\n<\/div>\n\t\t\n\t <\/section>\n\n\n

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