The constant supervision of a portfolio's holdings to maximize gains. Active managers rely on analytical research, forecasts, and their own judgment and experience in making investment decisions on what securities to buy, hold and sell.
Person or company responsible for making mutual fund investments. Organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices. Also known as investment advisor.
A mutual fund that attempts to achieve the highest capital gains. Investments held in these funds are companies that demonstrate high growth potential, usually accompanied by a lot of share price volatility. These funds are only for risk-seeking investors willing to accept a high risk-return trade-off.
Widely considered to be a measure of the 'value added' by an investment manager. It is therefore regarded as a proxy for manager or strategy skill. Alpha is sometimes described as outperformance of a benchmark or the return generated by an investment independent of the market – what an investment would hypothetically achieve if the market return was zero. More specifically, alpha is sometimes described as the return of an investment less the risk-free interest rate.
A negotiable certificate issued by a U.S. bank representing a specified number of shares (or one share) in a foreign stock that is traded on a U.S. exchange. ADRs are denominated in U.S. dollars, with the underlying security held by a U.S. financial institution overseas.
The return on an investment over a specified number of years, calculated as what an investor would have received each year if the cumulative return were distributed evenly over each year within the specified time period.
An increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or interest rates.
A fund that invests primarily in the stocks of companies located in Asia. These funds appeal to investors who believe that Asia potentially represents a growth area, and want to capitalize on that growth.
Also known as the offering price, the ask price is the price at which a mutual fund's shares can be bought. The ask price is calculated by adding a fund's current net asset value per share to its sales charges, if any.
An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon. The proportion of a portfolio that is allotted to various asset classes such as stocks, bonds and cash.
Funds that seek to provide an optimal mix of stocks, bonds and cash at any given time. Some asset allocation funds maintain a specific proportion of asset classes over time, while others vary the proportional composition in response to changes in the economy and investment markets.
An investment program that allows investors to contribute small amounts of money, such as $200 a month. For example, funds are automatically deducted from the investor's checking/savings account or paycheck and invested in a retirement account or mutual fund.
One of three possible sales charge schedules imposed by funds that charge fees. A special percentage charge assessed when mutual fund shares are redeemed. The amount of the fee usually varies depending on how long the investment is held--generally the longer the time period, the smaller the fee. Funds sold under several sales charge options usually refer to the shares sold with a back end load as class B shares.
A fund allocates its portfolio assets across stocks and bonds, normally in relatively equal proportions. This broader diversification across asset classes makes balanced funds lower risk than equity-only funds, but will not perform as well as equity-only funds in a bull market.
The smallest measure used in quoting yields and interest rate movements on fixed income securities, equal to 1/100th of 1%, or 0.01%.
在定息證券的利率及孳息改變時使用的最細計算單位，等於 1% 的1/100，即 0.01%。
Bear market 熊市:
A market in which prices of securities are generally declining.
Benchmark index 基準指數:
An index that serves as a reference against which the performance returns of a fund or portfolio is measured. For example, a U,S Equity Fund may be compared with the S&P 500 index to assess how it performs over time.
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%.
Also known as the "sell" price, the bid price is the price at which a fund's shares are bought back by the fund. The bid price of a fund share is usually its net asset value.
Blue-chip stocks 藍籌股:
A term used to describe the common stocks of corporations with the strongest reputation for generating earnings and paying dividends.
Blue chip stock fund 藍籌股基金:
A mutual fund that consists of a portfolio of large or well known companies for the purposes of achieving growth.
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 type of mutual fund that invests in bond and preferred stocks, providing a stable income with low risk.
An investment strategy that starts with a study of the fundamentals of an individual asset rather than with an assessment of macroeconomic issues. A bottom-up manager would focus on selecting individual properties or shares which offered good value and growth prospects.
A securities feature of some bonds or convertible securities that allow the issuer to retire the issue prior to the original maturity date. If the current interest rate falls below the yield paid on the security, it is in the issuer's best interest to call and retire the security, then reissue at the new lower rate. To reflect this risk for the holder of the security, a callable security is usually priced lower than a non-callable security.
The possibility that bonds will be re-paid (or "called") prior to maturity. This possibility increases during periods of falling interest rates.
Capital appreciation 資本增值:
A rise in the value of an asset based on a rise in market price. Essentially, the capital that was invested in the security has increased in value, and the capital appreciation portion of the investment includes all of the market value exceeding the original investment or cost basis.
Funds that invest primarily in common stocks the managers believe will provide maximum capital appreciation. Capital appreciation funds often resort to aggressive investment techniques, such as rapid portfolio turnover, leveraging, and investing in unregistered securities in order to achieve their objectives. Also known as aggressive growth funds.
The amount by which the proceeds from the sale of a capital asset exceed its original purchase price.
Capital growth 資本增長:
The increase in value of an investment when either its price rises or its profits are reinvested.
The total dollar value of all stocks and bonds issued by a corporation.
A The physical document representing ownership of a stock or bond.
Certificates of Deposit (CD) 存款證:
A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.
A type of back end load sales charge, a contingent deferred sales charge is a fee charged when shares are redeemed within a specific period following their purchase. These charges are usually assessed on a sliding scale, with the fee reduced each year the shares are held.
Certified Financial Planner marks are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements. The designation shows that the financial planner has had training in budgeting, taxes, savings, and insurance.
An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories and meeting short-term liabilities. Maturities on commercial paper rarely range any longer than 270 days. The debt is usually issued at a discount, reflecting prevailing market interest rates.
Investment strategy that do not fluctuate in price, such as savings accounts and money market funds.
Consumer price index (CPI) 消費者價格指數:
A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.
A type of accumulation plan where a mutual fund investor makes a firm commitment to invest a specified amount of money over a specific period of time.
Investor who takes the reverse position from the majority. Term is often applied to those who do not believe a bull market will last.
Convertible Bond 可換股債券:
A bond with an option, allowing the bondholder to exchange the bond for a specified number of shares of common stock in the firm. A conversion price is the specified value of the shares for which the bond may be exchanged. The conversion premium is the excess of the bond's value over the conversion price.
Mutual funds that invest primarily in convertible bonds and/or convertible preferred stocks.
Corporate bonds 企業債:
Debt instruments issued by corporations.
Corporate bond funds 企業債基金:
A fund that invests primarily in corporate bonds. In general, corporate bond funds seek income over capital growth.
Correlation measures the strength of the relationship between two investments. Combining low-correlating assets can help to diversify portfolio risk. Correlation values range between +1 and -1. Assets that are perfectly correlated, or move together in the same direction, have a correlation of +1. Those that exhibit an inverse relationship (moving in opposite directions) have a correlation of -1. A correlation of zero implies that there is no statistical relations.
A fund that invests primarily in the securities of a single country. In some cases, country funds also invest in securities outside the single country if those securities are expected to benefit by growth in that country.
The potential for price fluctuations in stocks sold in foreign countries due to events (political, financial, etc.) in these countries.
Credit rating 信貸評級:
A measure of a bond issuer's creditworthiness as rated by an independent agency, such as Standard & Poor's or Moody's Investor Services. Ratings are set as a reflection of the perceived financial stability of the issuer, from AAA to D. Bonds rated Baa or higher by Moody's, or BBB or higher by S&P, are considered "investment grade". Conservative investors tend to select funds composed of all AAA rated bonds, or investment grade bonds. More aggressive investors, looking for high yields, are more interested in funds that invest in lower rated bonds.
The danger that a bond issuer's ability to repay what it owes will deteriorate. This danger usually prompts bond rating firms to downgrade the credit rating of company or municipality that issued the bond, sending the yield of the bond higher to justify the increased risk associated with this bond.
A risk that incurs when an investor buys into a mutual fund that invests in foreign markets. Any foreign currency could depreciate against home currency reducing the return achieved in the foreign currency when translated back to home currency..
A return measure that indicates the amount of current income a bond provides relative to its market price. It is shown as: Coupon Rate divided by Price multiplied by 100%. For example, a bond with a $1,000 face value and a coupon of 5% purchased at $900 has a current yield of 6.56% (50 / 900). When the market price of a bond declines, its current yield rises. Conversely, when the market price rises, the current yield declines.
The organization (usually a bank) that keeps custody of securities and other assets of a fund. The custodian is a third party, independent from the fund promoter's organization. The custodian holds the fund's cash accounts, settles its trades and ensures that the fund is fulfilling its investment objectives.
A type of back end load sales charge, a deferred sales charge is a fee charged when shares are redeemed within a specific period following their purchase.
A decline in an investment's value.
Financial contracts such as futures, options and various securities that offer 'synthetic' access to an underlying asset such as a commodity, stock market or fixed income security. The price movements of a derivative generally follow the price movements of the underlying asset but derivatives generally require only small amounts of capital (margin) to gain exposure to the underlying asset.
The payments of dividends or capital gains. Funds are required to distribute gains (if any) to shareholders at least once per year.
The organization arranging for the sale of fund shares either directly to the public or through intermediaries, such as financial advisers.
The inclusion of a number of different investment vehicles in a portfolio in order to increase returns or be exposed to less risk. Diversification works best when the returns of the securities are varied, so that losses incurred by securities falling in price are offset by gains of those rising in price. By nature, mutual funds are a diversified investment.
A payment made to common and preferred shareholders out of a company's after-tax earnings. Dividends can be received from the ownership of stock or from mutual funds. Mutual fund share holders have the option to reinvest dividends automatically in order to purchase more shares.
The percentage that is derived through dividing the indicated annual dividend by the current price of an investment. For funds, indicated yield represents return on a share of a mutual fund held over the past year. For stocks, indicated yield represents annual dividends divided by current stock price.
An investment strategy that entails making regular payments into a mutual fund and having earnings automatically reinvested. Investors benefit from this strategy as they can buy more shares at lower prices during bear market. Since mutual funds permit the buying of fractional shares, the fixed amount will acquire more shares when the fund decreases in price, and fewer shares when the price rises.
Normally refers to newly industrialized markets of the developing world. The Asia-Pacific region, Eastern Europe and Latin America are commonly referred to as emerging markets.
Emerging markets funds 新興市場基金:
Fund that invest primarily in the stocks of companies in, or doing business in, developing countries and emerging markets. Emerging market funds usually have an investment objective of long-term growth and are generally considered aggressive stock funds.
Ownership of the company in the form of shares of common stock..
Equity income funds 股票收入基金:
Mutual funds that focus on large-company stocks that pay big dividends. As a result, they can be less risky than other types of stock funds.
Ethical fund 道德基金:
A fund that only invests in the securities of firms meeting certain social standards. For example, an ethical fund might exclude securities of companies that are known to practice discrimination, that operate in certain countries, or that produce specific products such as alcohol, tobacco, or nuclear weapons.
CDs issued by U.S. banks that have branches in other countries. These tend to have higher yields than domestic CDs.
European stock fund 歐洲股票基金:
A fund that invests primarily in the stock of Western European companies.
Ex-dividend date 除息日:
The day on which the price of a security is reduced to reflect dividend payout. The first day on which the buyer of a security will no longer be entitled to receive the recently announced dividend payment..
Fund shareholders pay expenses that go towards the operation and management of the fund. Expenses are often less than 1% of the investor's holdings in the value. Many investors choose to compare expenses as a factor in choosing which fund to invest in.
The operating costs, management fees, administrative fees and all other costs incurred by the fund expressed as a percentage of the fund's total asset. Funds with lower expense ratios are able to distribute a higher percentage of gross income returns to shareholders.
The value of a financial instrument as stated on the instrument. Interest is calculated on face/nominal value.
Family of funds 家庭式基金:
A mutual fund company which offers investors a choice of two or more mutual funds; with different objectives or investment strategies. Often shareholders have the option to easily exchange shares between different funds in the same family over the phone with no fee.
One who provides financial advice or guidance to customers for compensation. Financial advisors can provide many different services, such as investment management, income tax preparation and estate planning.
A qualified investment professional who helps individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve that client's goals. Financial planners specialize in tax planning, asset allocation, risk management, retirement and/or estate planning.
Investment vehicles that offer a fixed periodic return. This term is usually used in reference to government, corporate or municipal bonds, which pay a fixed rate of interest until the bonds mature, and to preferred stock, which pay a fixed dividend. Fixed income securities offer the guarantee of a fixed return, but do not offer an investor much, if any, potential for growth.
A fund that can invest in stocks, bonds and cash in whatever proportion the manager deems appropriate, providing the manager total flexibility to achieve maximum returns. Flexible portfolio funds are sometimes called asset allocation funds.
One of three possible sales charge schedules imposed by funds that charge fees. A sales fee paid by an investor at the time of subscription to the fund company or their distributors, and can range from 3% to 8% of the purchase amount.
The investment of nearly all available assets in securities other than short-term securities (such as savings and money market accounts). When a fund is said to be "fully invested", it usually implies that the fund's manager is confident that the securities markets will be improving.
Fund administrator (administrative agent) 基金管理人(行政代理):
Performs fund's administrative functions. The administrator calculates the value of the fund. This calculation is based upon the value of the assets in the fund's portfolio. The calculation produces a price known as the Net Asset Value (NAV). The NAV becomes the fund's dealing price.
The person(s) responsible for implementing a fund's investing strategy and managing its portfolio trading activities. A fund can be managed by one person, by two people as co-managers and by a team of three or more people. Fund managers are paid a fee for their work, which is a percentage of the fund's average assets under management.
Fund of funds (multi-funds, multi-advisor funds) 组合型基金:
A fund that invests in other funds. Fund-of-funds managers seek to reduce risk by investing in other funds thus avoiding the highs and lows of any single fund. These funds offer a single entry fee into the funds they are investing in which is usually far lower than the combined entry fees of each fund. Fund of funds usually offer great diversification. The disadvantage of funds of funds is that they add another layer of management expenses on to shareholders who are effectively paying for two fund managers.
A future is a derivative instrument that involves a contract to buy or sell an asset (stock index, commodity, currency, fixed income or other security) for delivery at a future date at a specific price. This is a practice commonly used by fund managers of aggressive growth mutual funds.
Receipt for shares in mainly emerging-market-based companies. GDRs are traded on numerous exchanges around the world, enabling investors access to emerging market companies without having to face custodian and other administrative delays that are often associated with the exchanges in emerging markets.
A strategy that seeks to reduce, or even eliminate, the extraneous risk in investment, such as currency risk in an international equity investment. In this situation, a fund manager would buy the currency forward at an agreed price. (Hedging is not to be confused with hedge funds, which are very different.)
A private investment partnership in which the fund manager is able to take both long and short positions. These funds typically use leverage and employ a large number of derivative instruments in their investments.
The date a fund was first made available to investors.
Periodic interest or dividend distributions obtained from a fund.
Income fund 收益基金:
A fund that invests primarily in fixed income securities and/or high-yielding utility, telephone, and blue-chip stocks. Capital appreciation is not a consideration for these funds.
Indicators used to provide a point of reference for evaluating a fund's performance. The most common indices for stock funds are the Dow Jones Industrial Average and the S&P 500 Index. For fixed-income funds it is the Lehman Brothers Aggregate Bond Index.
A fund that invests in a collection of securities intended to match that of a broad-based index (NOTE: It is not possible for investors to actually invest in the actual index, such as the S&P 500). In general, index funds seek the same or a slightly better return that the index they mirror. Index funds tend to charge low administrative expenses.
Stocks of companies with market capitalizations of more than $1 billion. Large-caps tend to be well established companies, so that their stocks entail less risk than smaller-caps, but which also offer less potential for dramatic growth.
Borrowing capital or using derivatives to maximize return on an investment. A leveraged investment is subject to a multiplied effect in the profit or loss resulting from a comparatively small change in price. Leverage offers the opportunity to achieve enhanced returns, but at the same time typically involves greater risk and can result in a loss that is proportionally greater than the amount invested.
The ease with which an investment can be converted into cash. Shares in a fund are generally considered highly liquid investments because they can be sold on any business day for their then current value.
The amount a fund pays to its investment adviser for its services. The average annual fee industry wide is about one half of or one percent of fund assets. A fund's management fee must be listed in its prospectus.
Also referred to as "market cap." Market capitalization is a measure of a corporation's value, calculated by multiplying the number of outstanding shares of common stock by the current market price per share. Market capitalization is usually grouped into four main categories: large-cap, mid-cap, small-cap, and micro-cap.
Refers to the potential of loss that is possible, as a result of the short term volatility of the stock market. Owning mutual funds, due to their diversification, shield an investor to some market risk that a stock holder may be vulnerable to.
Attempting to time the purchase and sale of securities to coincide with ideal market conditions. Mutual fund investors may switch from stock funds to bond funds to money market funds as the strength of the economy and interest rate directions change.
Stocks which are capitalized at between approximately $500 million and $1 billion. Mid-caps are often considered to offer more growth potential than larger-caps (but less than small caps) and less risk than small-caps (but more than large-caps).
A fund that invests primarily in the stocks of companies with a medium market capitalization (mid caps).
Money market instruments 貨幣市場工具:
Include short term investments such as CDs, Treasury bill, and short term commercial bonds. Money market funds invest in these types of short term investments; as a result, there is little to no risk of losing any portion of the principle investment.
A security that returns principal and interest monthly as payments are received on the underlying mortgages. They are debt obligations that represent claims to the cash flows from pools of mortgage loans, most commonly on residential property. Mortgage loans are purchased from banks, mortgage companies, and other originators and then assembled into pools by a governmental, quasi-governmental, or private entity.
The current market worth of a mutual fund's share. A fund's net asset value is calculated daily by taking the funds total assets, securities, cash and any accrued earnings, deducting liabilities, and dividing the remainder by the number of shares outstanding.
Used to signify financial centres which offered a more tolerant tax regime than those 'onshore'. Today, offshore centres are the legal domiciles for most internationally marketed funds. The administrative functions of internationally marketed funds are performed in the offshore centres.
A mutual fund that continues to sell shares to investors, and will buy back shares when investors wish to s redeems. Units are bought and sold at their current NAV.
Gives the holder the right to buy (call) or sell (put) a security or asset at a fixed price within a specified period or at a specified date.
Over-the-counter market 場外交易:
Also known as OTC, means the dealers directly bargaining themselves. In the OTC market, dealers are using telephone and computer network to trade, rather than using the exchange trading system. OTC markets do not have an automatic mechanism for disclosing price to public, and can process non-standardized transactions. Bonds, foreign exchange, forward contracts, swap and some non-standardized derivatives are primarily trading through OTC.
Ratio of the price of a stock to the total earnings of the company. A common measure of how expensive a stock is. P/E is an 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.
An inexpensive stock, also known as micro-cap stock. This term usually refers to stocks costing less than $1 per share, but it may also refer to stocks under $5.00 too. Many aggressive growth mutual funds have portfolios consisting of many cheap stocks, with the belief that cheap stocks have greater growth potential.
Fund investing on behalf of an organization to provide income for the fund's members upon retirement.
A measure of how well a fund is doing over time. Two commonly used mutual fund performance measures are yield (which measures dividends) and total return (which measures dividends plus changes in net asset value). Please be reminded that past performance is not a guaranteed of future performance.
Pooling is the basic concept behind mutual funds. A fund pools the money of thousands of individual and institutional investors who share common financial goals. The fund uses this pool to buy a diversified portfolio of investments.
The securities of a Fund. A fund's portfolio may include a combination of stocks, bonds, and money market securities.
Portfolio manager 投資組合經理:
The individual who is responsible for managing a mutual fund's assets.
Portfolio turnover 投資組合周轉率:
A measure of the trading activity in the fund's portfolio of investments. In other words, how often securities are bought and sold.
Positive yield curve 正孳息曲線:
When short-term interest rates are lower than long-term rates. This is the usual situation where investors would expect to gain a higher rate of return for holding on to a bond for a longer period of time.
Prepayment risk 提前償還風險:
The possibility that, as interest rates fall, homeowners will refinance their home mortgages, resulting in the prepayment of GNMA securities, and possible decline in net asset values of GNMA Funds.
Prospectus (or explanatory memorandum for unit trusts) 章程(或單位信託基金的說明備忘錄):
The official document that describes a mutual fund. It contains information on such subjects as the fund's investment objectives, policies, services and fees. Prospective investors should always read the mutual fund's prospectus before sending money.
A securities analysis that uses subjective judgment based on non-financial data such as management style and capacity, business cycles, product development, labor relations, operation risks and expenses.
Quantitative analysis is based on numeric analysis and statistics using key financial ratios and economic indicators. Financial models and simulation are built objectively to identify potential investment candidates.
A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.
A term often used in fund performance. For example, funds are referred to as being in the top or bottom quartile, meaning that this is where they have been ranked in relation to the other funds in their category.
The price at which a mutual fund's shares are redeemed (bought back) by the mutual fund. The redemption price is the approximate per share NAV at redemption, minus any fees that the fund deducts at that time, such as redemption fee. This price is shown as the "bid" price on newspaper.
Mutual funds that invest in one specific region of the globe.
Registrar and transfer agent 過戶登記代理:
Responsible for keeping records of, and for communicating with, a fund's shareholders. Typically this involves canceling and issuing the fund's shares.
Repurchase agreement (REPO) 回購協議:
A type of short-term loan much used in the money markets, whereby the seller (dealer) commits to buy a security back from the purchaser (investor) at a specified price at a designated future date. Purchaser earns interest competitive with money market rates.
The amount of net income returned as a percentage of shareholders equity calculated by dividing net income (after preferred stock dividends, but before common stock dividends) by average shareholders' equity. Return on equity indicates to shareholders how effectively their money is being employed.
A measure of how much risk is involved in producing a particular level of return. It is a return achieved per unit of risk or the risk associated with a particular level of reward, typically represented by the Sharpe ratio. Improving the risk-adjusted return depends either on increasing returns and maintaining the level of risk or maintaining the level of returns and lowering the associated risk.
The willingness of an investor to tolerate the risk of losing money for the potential to make money.
A measure of how much of a portfolio's performance can be explained by the returns from the overall market (or a benchmark index), values range from 0 to 100. If a portfolio's total return precisely matched that of the overall market or benchmark, it's 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. A higher R-squared value will indicate a more useful beta figure.
A board based unmanaged index focuses on the large-cap sector of the US market and often considered representative of the stock market in general. It covers 500 industrial, utility, transportation and financial companies of the US markets (mostly NYSE issues). The index represents about 75% of NYSE market capitalization and 30% of NYSE issues.
The S&P 500 Index由美國市值最大的 500 間公司所組成的指數，被公認為衡量美國股市整體的健全程度的指引。它涵蓋了美國市場500家最大約工業、公用事業、交通運輸和金融機構（主要在紐約證交所 交易）。這指數覆蓋約75％紐約證券交易所上市公司的市值和30％紐約證券交易所的公司數目。這指數屬非託管並不能直接進行投資。
S&P 500 index fund 標準普爾 500指數基金:
A fund that invests primarily in the stocks included in the S&P 500 Index. Sometimes referred to as blue-chip stocks, they tend to be of large, well-established companies.
A type of mutual fund that invests in the stocks of companies representing a specific industry, such as technology, utilities or health care; also known as the theme fund. Sector funds entail more risk, but may offer greater potential returns than funds that diversify their portfolios.
Stocks, bonds, money market or rights to ownership, such as options, typically sold by a broker.
Securities exchange 證券交易所:
Tightly regulated marketplace where stocks, bonds, and cash are traded.
Sharpe ratio 夏普比率:
The Sharpe ratio is a risk-adjusted method for measuring a fund's performance. A ratio of excess return per unit of risk calculated by subtracting the risk-free rate (for example the return from a US Treasury bill) from the portfolio's total return and then dividing this by its standard deviation. The higher the number the better the fund’s risk adjusted return.
A trading technique whereby an investment manager arranges to borrow stock from a stock lender with a view to selling it and buying it back at a lower price in the future.
SICAV stands for Societe d'Investissement a Capital Variable (an investment company with variable capital). SICAVs are common fund structures in Luxembourg.
SICAV (Societe d'Investissement a Capital Variable)是一家可變資本投資公司。SICAVs在盧森堡是一種非常普遍的基金結構。
Small caps 細價股:
Generally it is a stock with a market capitalization of between $500 million and $2 billion. In general, small caps tend to be less established companies that offer more growth potential than larger capitalized companies, but which also entail greater risk.
A fund that seeks aggressive growth of capital by investing primarily in stocks of relatively small companies with the potential for rapid growth. Many small cap funds come under the heading of an aggressive growth mutual fund.
A measure of risk-adjusted performance that indicates the level of excess return per unit of downside risk. It differs from the Sharpe ratio in that it recognizes investors' preference for upside ('good') over downside ('bad') volatility and uses a measure of 'bad' volatility as provided by semi-deviation – the annualized standard deviation of the returns that fall below a target return, say the risk free rate.
Funds that invest in one specific industry or industry sector.
Unlike investment, risk is not a consideration or speculator gambles on a risky investment in hopes of a high payoff down the road.
Standard deviation 標準差:
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.
The overarching strategy used by investment managers to set asset allocation and choose individual securities for investment. The investment style of a fund can be broadly drawn, such as "international bonds", or finely tuned, such as "mid-cap value stocks that pay steady income", which helps set expectations for long-term performance potential.
Investor willingness to purchase some assets or financial products (such as the newly listed stocks or funds).
The movement/ exchange of assets from one fund to another. An investor will switch mutual funds when their investment objectives change or because of market conditions. This is usually done within a family of funds, but can be done across different fund houses. The charge for same fund house switching is usually lower than cross fund house switching.
A fund that invests primarily in the stocks of companies engaged in the technology industry.
Top down 由上而下:
An investment approach that first seeks to define major economic and industry trends, and then proceeds to identify specific companies that are likely to benefit from those trends, the opposite of "bottom-up."
Amount shareholders pay as costs for an investment in a mutual fund. TER is calculated as a percentage of total investment. They include all operating expenses as well as annual management fee of the fund.
In the trust arrangements, the trustee, in accordance with the Trust Deed, acts on behalf of the beneficiary to manage the underlying assets. Trustee may be an individual or a company, so long as they are not beneficiaries.
The rate at which the fund buys and sells securities each year. For example, if a fund's assets total $100 million and the fund bought and sold $100 million of securities that year, its portfolio turnover rate would be 100%.
A fund that invests primarily in financial instruments issued or guaranteed by the U.S. Treasury or its agencies.
UCITS fund 可轉讓證券集體投資計劃基金:
UCITS stands for Undertaking for Collective Investment in Transferable Securities. The UCITS directive was agreed by the European Union member states in order to create a single passport for the sale of funds throughout Europe. A UCITS fund is a mutual fund or an open-ended investment company that is domiciled in Europe, and conforms to the various UCITS regulations.
Fund structure containing sub-funds (or compartments) with different investment objectives, focusing on different markets. Umbrella funds enable investors to switch between sub-funds for a low fee and to pursue different investment strategies within the same fund.
The investment style of attempting to buy underpriced stocks that have the potential to perform well and increase in price.
A measure of risk used most often in the investment industry. The magnitude by which the price of a security fluctuates as market conditions change. Funds whose price moves sharply are said to have high volatility. Those with stable prices have low volatility. It is usually calculated as ‘standard deviation’ and expressed as annualized volatility – the standard deviation on a yearly basis.
A term commonly used to refer to a private equity or hedge fund that Invests in a distressed securities (with low valuation) of the market. Its name comes after how vultures dispose dead bodies. Once this area of the market is rising, the fund's value should grow rapidly.
A widely used risk measurement technique that calculates the maximum loss that would be experienced in a day or some other pre-specified time horizon in the event of an increase in volatility or an adverse correlated move in market prices at a pre-specified level of probability.
The income return on investments. This differs from total return in that the income does not include price changes. Stock yields are expressed in dividends. Bonds have three yields: coupon (the annual payments paid by the issuer relative to the bond's par value), current (the bond interest rate as a percentage of the current price of the bond), and yield to maturity (an estimate of what an investor will receive if the bond is held to its maturity date).
A graph depicting yield as it relates to maturity. If short-term rates are lower than long-term rates, it is called a positive yield curve. If short-term rates are higher, it is called a negative, or inverted, yield curve. If there is little difference, it is called a flat yield curve.
The effective annual rate of return earned by a bond if held to maturity. This rate takes into account the amount paid for the bond, the length of time to maturity, and assumes coupon payments can be reinvested at the yield to maturity.