1-month LIBID rates: Good indication of the cost of borrowing U.S. dollars for one month’s time in European markets.
1-month rupee forwards: Agreements to either buy or sell rupees in exchange for U.S. dollars at a specified exchange rate one month into the future.
10-year government bond: a debt instrument backed by a government guarantee with an original maturity of 10 years.
10-year sovereign debt: a debt instrument backed by a sovereign or government guarantee with an original maturity of 10 years.
100-day moving average: Average of the prior 200 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.
12 month trailing EPS: 12 month trailing earnings per share is the sum of a company’s earnings per share for the previous four quarters
12-month forward return: Returns for the 12-month period following an observed trailing 12-month dividend yield.
12-month forward-looking P/E ratio: Estimated P/E ratio for a 12-month forward horizon.
12-Month Yield: The sum of the per-share dividends over the last 12 months, divided by the fund’s current net asset value (NAV)
12b-1 fee: An annual marketing or distribution fee in a mutual fund; this fee is considered an operational expense and is included in a fund’s expense ratio.
2- Year Treasury: a debt obligation of the U.S. government with an original maturity of two years.
200-day moving average: Average of the prior 200 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.
50-day moving average: Average of the prior 50 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.
A-share: shares traded on the Shanghai and Shenzhen stock exchanges. This is contrast to Renminbi B shares which are owned by foreigners who cannot purchase A-shares due to Chinese government restrictions.
AAA credit rating: This is the highest issuer credit rating assigned by Standard & Poor’s, signaling strong confidence that the issuer will be able to maintain its payment obligations.
Abenomics: Series of policies enacted after the election of Japanese Prime Minister Shinzo Abe on December 16, 2012 aimed at stimulating Japan’s economic growth.
Abu Dhabi General Index. A free float market capitalization weighted index of stocks listed on the Abu Dhabi Securities Exchange.
Active: Funds that attempt to outperform the market by selecting securities a portfolio manager believe to be the best.
Active manager: Portfolio managers who run funds that attempt to outperform the market by selecting those securities they believe to be the best.
Actively managed ETFs: Investment strategy where a manager selects securities in an attempt to outperform the performance benchmark.
Actively managed mutual funds: Investment strategies that are not designed to track the performance of an underlying index.
Adjusted gross income: Refers to a tax filer’s income level after accounting for allowable deductions.
ADRs: American Depository Receipts, shares of a firm incorporated outside the U.S. but issued by a global bank and traded in the U.S. denominated in U.S. dollars.
Agency execution: An execution whereby the broker executes the trade in the market at agreed upon instruction and passes on the exact execution to the client.
Agency: a debt security issued by a U.S. government-sponsored entity such as FNMA, FHLB, and SLMA.
Aggregate dividends: Weighting constituents according to the proportion of cash dividends that they generate compared to the sum total of cash dividends for all constituents within the index.
Alpha: Measure of risk-adjusted performance that compares how the constituents move relative to a benchmark.
Annual screening date: The screening date refers to the date upon which characteristics of eligible constituent firms are measured, whereas the rebalance refers to when the results from the screening date are implemented by way of Index weights and constituents.
Arbitrage Mechanism: The ability to compare the price of an ETF and its underlying basket and exchange one for the other utilizing the creation and redemption process.
Arbitrageur: A person who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and seek to capture a risk free profit.
ASEAN countries: Association of Southeast Asian Nations. Indonesia, Malaysia, the Philippines, Singapore and Thailand comprise the original members.
Ask Price: The price that someone will sell an ETF
Asset purchases: The Fed purchases longer-term securities issued by the U.S. government and longer-term securities issued or guaranteed by government-sponsored agencies such as Fannie Mae or Freddie Mac.
Asset- Liability Mismatch: refers to a situation when a company’s assets do not earn enough revenue to service their liabilities, especially debt.
Asset-Backed Securities Purchase Program: Program initiated by the European Central Bank aimed at increasing the availability of credit within the euro area by purchasing qualifying asset-backed securities.
Asset-backed security: A fixed income security whose value or cash flows depends on the value of another asset, such as a loan, lease, or receivable.
Attribution analysis: Compares the performance of one index or investment to another, noting particularly the differences in weights or holdings. This analysis quantifies both the positive and the negative impacts to selecting or heavily weighting different stocks or sectors.
Auction: a public offering of newly issued debt securities in which pricing is determined via an investor bidding process.
Austerity: Policies used by governments to reduce budget deficits during adverse economic conditions.
Authorized Participant (AP): An entity, usually an institutional investor, that submits orders to the ETF for the creation and redemption of ETF creation units.
Average Daily Trading Volumes – The average amount of individual securities traded in a day or over a specified amount of time. Trading activity relates to the liquidity of a security; therefore, when average daily trading volume is high, the stock can be easily traded and has high liquidity. As a result, average daily trading volume can have an effect on the price of the security. If trading volume isn’t very high, the security will tend to be less expensive because people are not as willing to buy it.
Average daily volume: Average dollar amount traded over the course of a single trading day.
reinvestment rate: Refers to the difference between the price return and the total return of a particular strategy attributable to dividends.
Average dividend yield: The average relationship of dividend per share divided by share price over a period of time. Higher values indicate greater potential for dividend reinvestment.
Average of All Years: Average of the 1-year forward performance for all 24 years for which data exists. This is an average of the individual calendar years taken separately for the MSCI Emerging Markets Index, not an average annual return.
Average Value: The average value of the “Defensives Relative to Cyclicals” values over this period.
Average yield: Refers to the average interest rate paid by credit card customers on their credit card balances; in effect the charge for loaning the credit card borrowers money.
B-rated: Standard & Poor’s credit rating that implies the issuer is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.
Balance sheet: refers to the cash and cash equivalents part of the Current Assets on a firms balance sheet and cash available for purchasing new positions
BAML High Yield 0-5 Constrained Index: tracks the performance of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market
Bank loan: A private debt arrangement issued by a financial institution which is senior to other creditors.
Barclays 2- Year U.S. Treasury Bellwether Index: tracks the performance and attributes of the most recently issued, or on-the-run, 2-Year U.S. Treasury.
Barclays Global Aggregate Corporate ex-U.S. Total Return Index Hedged USD: A broad-based measure of the global investment-grade, fixed-rate, fixed income corporate markets outside the United States hedged in U.S. dollars.
Barclays Global Aggregate Corporate Index: the corporate component of the Barclays Global Aggregate Bond Index.
Barclays Global Aggregate Index: A broad-based measure of the global investment grade fixed-rate debt markets. The index includes the U.S. aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Index.
Barclays Global Credit Index: Index which contains investment grade and high yield credit securities from the Barclays Multiverse Index.
Barclays Global Treasury Index: represents the government component of the Barclays Global Aggregate Index.
Barclays HY 2% Constrained Index: An issuer-constrained version of the U.S. Corporate High-Yield Index that measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds.
Barclays Multiverse Index: a broad-based measure of the international fixed-income bond market. The index represents the union of the Global Aggregate Index and the Global High Yield Index.
Barclays Rate Hedged U.S. Aggregate Bond Index, Negative Five Duration: Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of -5 years. Market values of long and short positions are rebalanced at month-end.
Barclays Rate Hedged U.S. Aggregate Bond Index, Zero Duration: Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of 0 years. Market values of long and short positions are rebalanced at month-end.
Barclays Rate Hedged U.S. Aggregate Index, Negative Five Duration. Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of -5 years. Market values of long and short positions are rebalanced at month-end.
Barclays Rate Hedged U.S. Aggregate Index, Zero Duration. Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of 0 years. Market values of long and short positions are rebalanced at month-end.
Barclays Trade-Weighted Dollar Bull Index: is part of the Barclays Trade-Weighted index family, which intends to reflect the appreciation or depreciation of a reference currency against a Trade-Weighted basket of other currencies.
Barclays U.S. Aggregate Bond Index: Represents the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, as well as mortgage and asset backed securities.
Barclays U.S. Aggregate Bond Index, 1-3 Year: This index is the 1-3 Yr component of the U.S. Aggregate index.
Barclays U.S. Aggregate Corporate Total Return USD: A broad-based measure of the global investment-grade, fixed-rate, fixed income corporate markets outside the United States
Barclays U.S. Aggregate Enhanced Yield Index: a constrained, rules-based approach that reweights the sector, maturity, and credit quality of the Barclays U.S. Aggregate Index across various sub-components in order to enhance yield.
Barclays U.S. Corporate High Yield Index: Covers the universe of fixed-rate, non-investment-grade corporate debt.
Barclays U.S. Dollar Floating Rate Note (FRN) Index: provides a measure of the U.S. dollar denominated floating rate note market.
Barclays U.S. IG Corporate Index: A broad-based benchmark that measures the investment grade, fixed-rate, taxable, corporate bond market.
Basel II capital adequacy: Measure of a bank’s capital in accordance with generally accepted standards of international bank regulation, with higher values indicating greater potential ability to withstand adverse events.
Basel III: a global, voluntary regulatory framework on bank capital adequacy, stress testing and market liquidity risk. Introduced by the Basel Committee on Banking Supervision in 2010–11, and most recently scheduled to be implemented by 31 March 2019.
Basis point: 1/100th of 1 percent.
BBB-: Standard & Poor’s credit rating that implies the borrower has adequate capacity to meet financial commitments, but may be more vulnerable to adverse economic conditions. This rating represents the lowest level of investment-grade.
Bear market: A sustained downturn in market prices, increasing the chances of negative portfolio returns.
Behavioral finance: An academic branch of finance devoted to studying the behavior of individuals as it relates to their financial decisions.
Beta: Measure of the volatility of an index or investment relative to a benchmark. A reading of 1.00 indicates that the investment has moved in lockstep with the benchmark; a reading of -1.00 indicates that the investment has moved in the exact opposite direction of the benchmark.
Beta benchmark: Characterized by measuring the performance of a particular universe of equities without attempting to utilize selection and weighting to generate differences in performance relative to this universe.