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Table of Contents
- 1 Alpha
- 2 Alternative Minimum Tax (AMT)
- 3 Annual report
- 4 Annualized
- 5 Annualized rate of return
- 6 Appreciation
- 7 Asset allocation
- 8 Asset class
- 9 Average maturity
- 10 Balanced fund
- 11 Bear market
- 12 Benchmark
- 13 Beta
- 14 Blue chip
- 15 Board of Trustees
- 16 Bond
- 17 Bond fund
- 18 Breakpoint
- 19 Bull market
- 20 Capital
- 21 Capital gain
- 22 Capital gains ex-date
- 23 Capital gains long term
- 24 Capital gains reinvest NAV
- 25 Capital gains short term
- 26 Capital loss
- 27 Capitalization
- 28 Cash equivalent
- 29 Common stock
- 30 Contingent deferred sales charge (CDSC)
- 31 Corporate bond
- 32 Country breakdown
- 33 Custodian
- 34 Cut-off time
- 35 Daily dividend factor (date)
- 36 Default
- 37 Distribution schedule
- 38 Diversification
- 39 Dividend
- 40 Dividend paid
- 41 Dividend reinvest NAV
- 42 Dividend yield
- 43 Dollar cost averaging
- 44 Dow Jones Industrial Average (Dow)
- 45 Earnings Per Share (EPS)
- 46 Equities
- 47 Equity fund
- 48 Ex-Dividend
- 49 Ex-Dividend date
- 50 Exchange privilege
- 51 Expense ratio
- 52 Expense ratio (date)
- 53 Federal Funds Rate (Fed Funds Rate)
- 54 Federal Reserve Board (The Fed)
- 55 Fixed income fund
- 56 Fixed income security
- 57 Franchise
- 58 Fund
- 59 Growth investing
- 60 Growth stock
- 61 Growth-style funds
- 62 Index
- 63 Individual Retirement Account (IRA)
- 64 Inflation
- 65 Interest rate
- 66 Interest-rate risk
- 67 Investment advisor
- 68 Investment company
- 69 Investment grade bonds
- 70 Investment objective
- 71 Junk bond
- 72 Large-cap
- 73 Letter of intent
- 74 Lipper ratings
- 75 Liquidity
- 76 Loads
- 77 Long-term investment strategy
- 78 Management fee
- 79 Market price
- 80 Market risk
- 81 Market timing
- 82 Maturity
- 83 Maturity distribution
- 84 Median Market Cap
- 85 Mid-cap
- 86 Money market mutual fund
- 87 Morningstar ratings
- 88 Mutual fund
- 89 NASDAQ
- 90 Net Asset Value Per Share (NAVPS)
- 91 Number of Holdings
- 92 Par value
- 93 Portfolio
- 94 Portfolio allocation
- 95 Portfolio holdings
- 96 Portfolio manager
- 97 Preferred stock
- 98 Premium
- 99 Price-to-book ratio (P/B ratio)
- 100 Price-to-earnings (P/E) ratio
- 101 P/E Ratio (1 yr. trailing) (long position)
- 102 P/E Ratio (1 yr. forecast)
- 103 Prospectus
- 104 Proxy
- 105 Public offering price (POP)
- 106 Quality distribution
- 107 R2
- 108 Ratings
- 109 Recession
- 110 Redemption
- 111 Reinvestment option
- 112 Relative risk and potential return
- 113 Rights of accumulation (ROA)
- 114 Risk tolerance
- 115 Sales charge
- 116 Sector
- 117 Sector breakdown
- 118 Securities
- 119 Securities and Exchange Commission (SEC)
- 120 Share
- 121 Share class net assets (date)
- 122 Share classes
- 123 Sharpe Ratio
- 124 Short-term investment
- 125 Small-cap
- 126 Standard Deviation
- 127 Statement of additional information (SAI)
- 128 Stock
- 129 Stockholder
- 130 Systematic investment plan (SIP)
- 131 Tax-exempt income
- 132 Time horizon
- 133 Top 10 holdings
- 134 Top 10 long and short positions
- 135 Top five contributors
- 136 Top five detractors
- 137 Top five holdings
- 138 Top five industries
- 139 Total return
- 140 Tracking Error
- 141 Transfer agent
- 142 Treasury Bill
- 143 Treasury bond
- 144 Treasury note
- 145 Treasury security
- 146 Trustee
- 147 Turnover Ratio
- 148 Valuation
- 149 Value investing
- 150 Value stock
- 151 Value-style funds
- 152 Volatility
- 153 Weighted Average Market Cap
- 154 Weighted average maturity (WAM)
- 155 YTD total return
- 156 YTD Return (w load)
- 157 Yield
- 158 Yield to maturity
- 159 12b-1 fee
- 160 30-day SEC yield (date)
- 161 52 Week High
- 162 52 Week Low
Gauges return of investment and performances against market index
Alternative Minimum Tax (AMT)
Required tax which is in place to ensure taxpayers cover the minimum. Recalculates income tax through adjusting gross income through inclusion of tax preferences.
A detailed view of the financial dealings of a company or fund, sent out to investors and clients to monitor performance.
Referring to rate of interest, return on investment or inflation, recalculated to give an annual rate.
Annualized rate of return
Equivalent annual return received by investor over a certain period. Aids in calculating investment performance over a set period of time. Also knows as compound growth rate.
Description of an asset which rises in value
Diversification of a portfolio in order to mitigate risk. Asset percentage will be adjusted in accordance with investor’s risk tolerance.
Combining securities which offer similar characteristics, often used with bonds, stocks and currency investment.
Often known as weighted average maturity, this covers the weighted average period of time before mortgages in a mortgage backed security (MBS) matures. Term often used more broadly to describe the maturity of debt securities within a portfolio.
A fully diverse fund of matured stocks and cash interests which seeks to ensure both income and long term growth
The description of a market with stock prices which have rapidly dropped. More specifically this is used to describe a market which has securities that have fallen in price by 20%. In contrast, a vibrant market with rising prices is known as a Bull Market
A standard figure which is offered by an index, used to gauge performance of a security.
A tool which is used to measure the volatility of a stock in relation to the market on the whole. The market is given a beta of 1.0 and then the stocks are ranked depending on their deviation from the market.
Description of a high quality, well-established and low risk stock which offers a stable level of growth. Often forms the core of a diverse portfolio.
Board of Trustees
Electing individuals which take care of the management of a company’s activity.
Instrument which is used to represent the existence of a loan, the borrower in this case, usually a government or corporate operation, agrees to pay a set amount at a future date. The bond can be bought and sold to yield income for the original lender.
A collection of investors pooling money which is used as a vehicle to purchase bonds.
The point at which an investor’s account balance in a mutual fund qualifies for a reduced sales charge, an incentive offered by funds to gain further investment.
The opposite of a bear market where stocks are rising in price and investors are confident, optimistic and actively investing.
The financial assets help by a company which it is able to access, this could look like liquid cash, bonds, marketable securities or cash equivalents.
Description for the gain which is made from the purchase and subsequent sale of a security or asset.
Capital gains ex-date
This is date at which the per share amount is taken away from the fund’s net asset value per share. Usually the business day following the record date.
Capital gains long term
On assets held for more than a year, this is the figure given to a sold asset through the deduction of buying price from selling price.
Capital gains reinvest NAV
The reinvestment by a mutual fund following the positive sale of an asset. A portion of these proceeds will be reinvested and the remainder will be distributed amongst investors. Both actions decrease the net asset value (NAV) of the mutual fund.
Capital gains short term
Reverse of long term capital gains, positive figure on assets which have been bought and sold within a single year.
Description stating the lost value of an asset which has been sold at a lower price than it was purchased. Forced sales or a potential bear market often prompt such losses.
Measurement of the value of a company, calculated through the multiplication of share value by number of shares.
Investment securities with high liquidity and high credit quality designed for short term investments. Examples include treasury bills, bankers acceptances, corporate commercial paper and certificates of deposits.
A security which represents ownership within a corporation. Those who own common stocks receive income based on the assets that remain after creditors, preferred stockholders and bondholders are paid.
Contingent deferred sales charge (CDSC)
A fee, load or sales charge which is paid by mutual fund investors following the sale of a Class B fund share. Often called an exit fee, this charge is loaded at the back end of a set time period from original purchase date, typically reducing over time.
Debt security which is issued by a corporate organization and then sold off to investors to raise capital for the organization, the investor counts on pre-agreed interest payments.
Simple balance sheet which gives an overview the securities held by a country.
Financial institution which holds the securities of a customer for safekeeping, a custodian or custodian bank will also oversee trades and changes in portfolio management.
The exact time of day when trading has to cease.
Daily dividend factor (date)
Decimal representation of the daily performance of an asset, used as an indicator of overall annual performance when calculating risk of further investment.
The failure to repay a debt in accordance with the original loan agreement which has been set out.
A set schedule which recognizes the date at which a mutual fund will release dividend to its investors.
The distribution of investment across multiple assets in order to reduce risk and increase health of a portfolio.
Profits made by a company which are then shared as dividend to shareholders and preferred shareholders. There is no obligation to pay dividends but this is widely considered a good incentive to promote further investment in a company.
The amount paid to shareholders or those who invest in hedge of mutual funds.
Dividend reinvest NAV
Dividends which shareholder receives which are instantly reinvested instantly into an asset, thus lowering net asset value of the fund.
This is a financial ratio (dividend/price) which indicates the level of annual dividends paid out, relative to the price of the stock.
Dollar cost averaging
Long term strategy involving scheduled investment in a stock over a set period of time. The principles behind this theory are that an investor can gain more shares at a low price and less at the higher price with this strategy.
Dow Jones Industrial Average (Dow)
This is the most commonly followed stock index which measures performance of 30 blue-chip companies. The Dow is often used to gauge overall performance of the US stock market.
A commonly used indicator of a company’s profitability, EPS is found through the division of outstanding shares of its common stock, with the company’s profit.
These are the same thing as common stocks in that they are used as an indicator of partial ownership of a business. Equities do not have any fixed interest rates or provide income.
A vehicle through which stocks and equities are purchased, multiple investors fund the pool and then, depending on the goal of the fund, they will opt to purchase common stocks or preferred stocks at a range of risks which have been pre-agreed.
A currently trading stock which has had the value of its next payout deducted already.
This is the date when the next payment is actually removed from the stock value. Normally the date is around 3 weeks prior the day that the dividend is due to be paid to out.
This gives an opportunity to investors in a mutual fund to change their investment to a new fund, within the same family as the original fund.
This ratio covers the amount that needs to be removed from a payout owing to administrative costs. The ratio is calculated by dividing the operating expenses for a fund over the year by the average dollar value of its net assets.
Expense ratio (date)
This is the annual fee which is paid by investors for the handling of the fund, expressed by percentage.
Federal Funds Rate (Fed Funds Rate)
This is the official interest rate which is set by the Federal Open Market Committee (FOMC). The rate is used by banks and financial institutions lend their reserves to one another on a daily basis.. The rate is often used as a clear indicator of where interest rates are heading, owing to the fact that it is altered each day.
Federal Reserve Board (The Fed)
The governing body of the Federal Reserve System. The Fed is what regulates U.S. money supply through setting the discount rate and altering credit availability through the changing of interest rates.
Fixed income fund
This is a fund which focuses its investments on fixed income securities such as a treasury bonds.
Fixed income security
A debt instrument that pays a regular fixed rate of interest and offers a repayment of the principal upon maturity.
This is an authorization which is given by a company, government or an individual to carry out a number of specific commercial activities under their name.
A vehicle which pools together money from multiple investors who trust in the fund owners to invest in their best interest. Height of risk will be discussed and agreed upon from the outset. Generally there are 2 types of funds that are available; the first are mutual funds set up by companies in the securities business; and (2) collective funds set up by bank trust departments.
A focus on buying stocks in only those companies which have excellent growth projections or which are growing at great speed.
A share in a company which is widely expected to grow at a faster rate than the average growth of the market. Those investing in these stocks expect to make money through capital gains when they eventually sell the stock.
Mutual funds which focus primarily on those stocks with high potential for faster growth than the market. Targets for this kind of investment are found by concentrating on rapidly expanding areas of the economy and then investing in companies which have reliable earnings growth.
This is a statistical measure of a particular index and is used to gauge economic stability and success. Probably the most famous index is the S&P index which measures 500 stocks for America’s largest publicly traded companies. The index measures activity of buying and selling in these companies and then offers a metric to gauge this performance.
Individual Retirement Account (IRA)
A savings account that enables the saver to save money in a tax-advantaged way, often allowing you to save with tax-free growth. Those who are able to qualify for an IRA are allowed to make annual contributions of up to $3,000 ($6,000 for a married couple with a single-income who are submitting a joint income tax return).
Inflation is a general increase in prices which coincided with a fall in the purchasing value which money has.
The fixed rate which is changed by a lender or bondholder for borrowing of assets. Typically this is expressed as an annual percentage of the remainder of the loan which is outstanding.
The potential for losses on an investment which happens as a result of a change in interest rates.
A professional analyst which is often hired by mutual funds in order to ensure that they are investing wisely and that their processes used to identify investment potential are in good order.
A corporation, trust or partnership which is entirely responsible for managing shareholder’s funds. The company will look to invest in securities which fit the profile of the investor’s targets. Mutual funds, closed-end funds and unit investment trusts are all considered as investment companies.
Investment grade bonds
Bonds with a certain rating signifying that they have a relatively low risk of default.
The target position of an investment company based on what their clients have asked for. Generally this will be a diverse portfolio of securities with varying risk, with the inclusion of fast and slow growth companies and a solid level of profitability.
A bond which has been given a low credit rating by an agency, usually BB or lower which is below the investment grade required.
Describing a company which has a market capitalization value greater than $10 billion.
Letter of intent
A sign of good faith from an investor to a fund which they are involved with that denotes their intention to invest certain sums of money at certain times in the future. This is not a legally binding contract, simply an honest intention which the fund can count on.
The Lipper Mutual Fund Industry Average is an index of the performance level for all mutual funds, as reported by Lipper Analytical Services of New York. The ratings are released quarterly and annually and are available for different types of fund. They provide a useful barometer of progress for mutual fund managers who attempt to surpass the industry average as well as the growth figures of other funds in their category.
The ease by which an asset or security can be turned into cash without it having an impact on its market price.
(back-end, front-end and no-load) – These are charges, fees and commissions which are charged by a mutual fund. Front refers to an early cost when the asset is purchased, back refers to a charge at the point of sale.
Long-term investment strategy
An approach to investing which seeks to grow a healthy portfolio over a number of years. These investors will not care about the daily fluctuations but rather focus on the appreciation of an investment over time.
The cost of an investment advisor to mutual fund.
Valuation of an asset under current market conditions.
The risk levels attached to an asset with regards to its ability to turn negative..
Market timing is a phrase used by day traders and those who look to secure the purchase or sale of a stock at the optimum time for profit.
This describes the date when a bond or a note becomes payable.
The assessment of a portfolio based on the dates at which each asset was bought and the charting of their progress.
Median Market Cap
The median market cap is used to give investors a full picture of where their assets are. Through the calculation of market price multiplied by number shares, investors get a midpoint where half the stocks are above the market and the other half fall below.
Used to describe the stocks of companies which have capitalization of between $3 and 10 billion.
Money market mutual fund
A form of mutual fund which focuses on short term investments which are highly liquid. These often include cash, cash equivalent securities and debt-based securities with high credit ratings.
This is the overall risk metric which is used to describe a risk-adjusted return for a fund. The rating is between 1 and 5 stars, with 5 being the best rating.
A vehicle which is managed by an investment company which then seeks to pool funds from investors which it then uses to buy and sell a range of assets, offering dividends for the investor. .
National Association of Securities Dealers Automated Quotations system. Owned and operated by the National Association of Securities Dealers (NASD), NASDAQ is a global, electronic marketplace which is used for the buying and the selling of a wide range of securities. This is a lightning fast system used across the trading world.
This is an expression which describes the net asset value per share of a mutual fund. To reach this measure the total net asset value of the fund is divided by the number of shares. Also known as book value per share.
Number of Holdings
The total sum of share and asset holdings within a single portfolio.
Par value describes the amount that a bond was purchased for, this will be the same value that is repaid once the bond matures.
A portfolio is the collective group of assets, bonds, securities and stocks which an individual or a fund holds. The aim is to always have a portfolio which is diverse and well balanced with risk.
The specific asset class which is used to group together investments within a portfolio.
The collection of stocks, bonds, options, futures, mutual funds and exchange-traded funds that are held in a portfolio.
Person or a group which holds the responsibility for investing in either exchange traded, mutual or closed-end fund’s holdings. Funds depend heavily on the wit, experience and skill of portfolio managers
There are two equities which are common stock and preferred stock. The latter is a higher class of ownership, which offers a superior claim to assets, more valuable dividends and asset distribution. Number of preferred stocks available differ, depending on issue.
The difference in the purchase price of a par stock and the sale price.
Price-to-book ratio (P/B ratio)
This metric calculates the difference between a company’s market capitalization and its overall net worth, or book value. To calculate P/B ratio, the price per share of a stock is divided by the book value per share. This is most commonly used when looking at stock portfolios and measuring performance.
Price-to-earnings (P/E) ratio
This metric is used to show investors the value that they are paying for the relative earning performance of a stock. P/E is calculated by dividing the value of a stock by its per-share earnings.
P/E Ratio (1 yr. trailing) (long position)
The price of a stock currently which is then divided by its per-share earnings from the current year.
P/E Ratio (1 yr. forecast)
The price of a stock currently which is then divided by its projected per-share earnings for the coming year.
This is the ‘catalogue’ of options which investors will receive prior to their investment in a particular fund. The prospectus will detail what the fund intends to do with its investments and will specify risk-level, industries to invest in and types of assets it will seek to purchase. There is also necessary information placed in the prospectus as per the SEC, including company background, history and certifications.
A vote which is cast by a board or committee member on behalf of another who couldn’t attend.
Public offering price (POP)
The original price of a mutual fund stock, including fees, when it is released to the public through an underwriter.
Assessment of holdings in a portfolio which are ranked based on performance.
A statistical metric which is representative of a fund’s performance. This is explained thanks to the benchmark index of 0-100. An R2 of 100 for example then it means every single one, 100%, of a fund’s movement can be determined by a certain benchmark index.
The method by which the credit quality of bonds is measured through independent rating companies. These measure, in most cases, the probability of a punctual repayment on debt securities.
A recession is named after two consecutive quarters which see the GDP (Gross Domestic Product) of a nation fall.
The sale of mutual fund shares back to the company which issued them.
A pre-agreed deal between investor and fund that their dividends and profits will be automatically reinvested.
Relative risk and potential return
This is the sweet spot between the amount of risk that an investor is willing to take, and the potential return of an asset which falls inside that window.
Rights of accumulation (ROA)
This is where a shareholder has the right to purchase additional shares in a mutual fund without having to pay the full sales commission charges. The point is reached if the shareholder has holdings already that exceed a pre-set ROA breakpoint.
The degree of potential loss or gain that an investor is willing to take with their investments .
The additional cost on top of the share price which an investor will pay to a financial advisor, broker or investment advisor who executes the trade. In the case of mutual funds, there are regulations which ensure that they cannot charge more than 8.5 percent of the overall value of the investment. Usually this fee is already built into the price offered.
A particular area of the economy which some investors like to focus on, energy, fintech etc.
Division of a portfolio’s securities by industry categories.
General term used to apply to assets such as stocks, bonds and futures.
Securities and Exchange Commission (SEC)
This is a federal agency which is in place to set laws and regulations and to ensure that they are abided by. The SEC monitor fund activity, companies within the securities industry and private investors.
A unit of ownership in investments such as stocks or mutual funds.
Assets which a fund may hold that fall into various classed, with are only available to those with high net worth.
This is the designation of share type based on their class. Share classes are differentiated by the voting rights received by shareholders. As an example, listed companies will generally divide shares into two, Class A and Class B, each class offers different voting rights to shareholders.
Developed by Nobel laureate William F. Sharpe, this is a ratio which helps investors understand potential return versus perceived risk. This ratio is determined based on the average return earned in excess of risk-free rate per unit of volatility. The volatility is a basic measure of fluctuations in price of either an asset and a portfolio.
An asset which is bought with the intention of being sold within a single year.
Stocks of a company which have between less than $3billion of market capitalization.
Standard & Poor’s Index (S&P)
Standard & Poor have an index which charts the movements of stock prices of the country’s 500 largest publicly traded companies.
Risk measurement that an investment won’t achieve what is anticipated during a given period. The smaller the standard deviation, the less risky the investment will be.
Statement of additional information (SAI)
Often referred to as Part B of a prospectus this provides additional information about the fund alongside the prospects for a potential investor.
A security which is representative of partial ownership in a company.
The person or group who owns common or preferred stocks (also called ‘shareholder’).
Systematic investment plan (SIP)
Investors pay a mutual fund a set amount for certain shares on a scheduled basis.
Income brought in that is not subject to income tax rules.
The expectation of time which an investor anticipates to hold their securities.
Top 10 holdings
The largest 10 holdings in a portfolio, this is always based on overall value. .
Top 10 long and short positions
The top 10 holdings according to market value in long and short position categories. A long position describes when an investor buys a stock, commodity or currency, expecting its value to rise. Conversely a short position sees investors sell their stocks with the intention of buying them again at a lower price in the future.
Top five contributors
The 5 most-represented industries or sectors within a portfolio.
Top five detractors
Top 5 portfolio holdings that have brought largest losses.
Top five holdings
This describes the top 5 investments made within a portfolio, these can differ from most valuable depending on performance of these and others in the portfolio.
Top five industries
Top 5 industries within a certain portfolio with the highest representation based on the amount of invested assets.
This is the numerical value which accounts for all financial returns made over a certain period of time. The total return features all interest and dividends which have been made, prior to fees and any expenses are deducted.
Tracking error explains the divergence between the behavior in price of the position of a portfolio and the same behavior of the benchmark. Ultimately this is used to describe why a mutual, hedge of exchange-traded fund hasn’t found the results which were originally anticipated.
A trust company or very often a commercial bank which keeps records of those who own stock and bonds of a publicly traded company. The role of the agent is to record transactions and which is able to cancel and issue certificates as well as processing investor mailings and many other issues which the investor may have.
A short-term (less than 1 year) debt obligation from the U.S. government which is backed by the treasury department. Often sold in denominations of $1,000.
Negotiable long term bond which have maturities greater than 20 years. T-bonds are capable of earring interest periodically until they mature.
Marketable, medium-term (one year to 10 years) U.S. government debt obligation, backed by the government’s full trust and credit.
This is the phrase used to cover the offering of treasury notes, bonds and bills.
A person who company that both holds and administers the property and/or the assets of a third party. Trustees act on behalf of the 3rd party, either entrusted by that 3rd party to do so or to have been appointed by another.
This is the percentage of investments by a mutual fund which change hands over a certain period of time.
An estimation of the overall value of a company. This will be based on more than just assets and money held, their potential and their dealings will also be factored in.
This is an investment strategy whereby funds and investors will look to highlight securities which they firmly believe are below their own valuation. The securities are bought and then sold when it is believed that they have hit their true valuation.
A stock which is perceived to be trading below its ‘true’ value.
These are funds which focus on the identification and the subsequent investment in value stocks.
The swift fluctuation of the value of a security, the less the price moves, the less volatile the security is.
Weighted Average Market Cap
This describes an index which is heavily dominated and manipulated by the share price of those companies with the biggest market cap.
Weighted average maturity (WAM)
A simple metric which takes the maturity dates of every security in a portfolio and then divides by the quantity to get a mean or average weighted maturity.
YTD total return
Taking into account appreciation and dividends this offers all of the return that has been made from a security, year to date.
YTD Return (w load)
The overall return on a certain investment since the turn of the year which will include appreciation, dividends and interest. The difference with this and YTD total return is that the final figure is after expenses or charges have been deduced.
The yield determines the amount of shares or dividends to be paid by the investor based on the return on capital which is then expressed by percentage.
Yield to maturity
The total return which an investor can expect on a bond based on it being held until it matures, expressed as an annual rate.
Fees paid by a mutual fund or an exchange-traded fund in order to cover the costs of marketing and selling MF shares, as well as shareholder services. The SEC rule which gives authority for funds to charge these fees is called 12b-1, hence the name.
30-day SEC yield (date)
This is a calculation of the yield over the past 30 days, starting from the final day of the previous month. This figure indicates the dividends and the interest which have been earned during that period once the expenses have been subtracted. The 30-day SEC yield is an estimate which is expressed as an annual percentage rate.
52 Week High
The highest price of a security across a 52-week period.
52 Week Low
The lowest price of a security across 52-week period.