Glossary
Find handy definitions of financial jargon quickly and easily.
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Account
An account is a sum of money to be invested. This may come from companies and high net worth individuals who would like large amounts of money to be managed for them. Often used interchangeably with portfolio or fund.
API
An application programming interface (API) is a specification intended to be used as an interface by software components to communicate with each other.
Alpha
Alpha represents the portion of a fund's return that is generated solely by the skills of the portfolio manager. The Alpha (or Intercept) is the value on the Y axis when the X axis is zero. When measuring two investments, usually a fund against an index, Alpha...
Asset
In business and accounting, assets are everything of value that is owned by a person or company. The balance sheet of a company records the monetary value of the assets owned by the company It is money and other valuables belonging to an individual or business. The...
AIFMD
Alternative Investment Fund Managers Directive (AIFMD) has now introduced this broad concept of risk management as an integral part of the responsibilities of the alternative investment fund managers (AIFM).
Attribution
Attribution refers to a quality or characteristic. With regards to the investment community attribution is often analysed to assess a fund’s performance and therefore the abilities of the portfolio or fund managers.
Absolute VaR
Absolute VaR is defined as the VaR of the UCITS capped as a percentage of NAV (Net Asset Value). Other UCITS related terms
Annex IV Reporting
Alternative Investment Fund Managers Directive (AIFMD) has now introduced this broad concept of risk management as an integral part of the responsibilities of the alternative investment fund managers (AIFM).
Asset Class
Asset class is generally a group of securities with similar market characteristics, or subject to the same laws and regulations. The most commonly utilized asset classes include equity, bonds, cash and derivatives.
Asset Valuation
The process of determining the value of a portfolio, company, investment, or balance sheet item.
Asset Manager
The person placed in charge of decisions regarding assets in the fund or portfolio.
Adjusted Sharpe Ratio
Adjusted Sharpe Ratio (ASR) explicitly adjusts for skewness and kurtosis by incorporating a penalty factor for negative skewness and excess kurtosis.
Active Weight
The difference in allocation of an individual security or portfolio segment between portfolio and the benchmark. For example, if a portfolio allocates 12% in the IT sector, and the benchmark's allocation in IT is 7%, then the Active Weight of the IT segment of the...
Active Management
Active management refers to an investment strategy where the portfolio managers rely on extensive analytical research and market forecasts to make investment decisions with primary goal of outperforming the market indices.
Annualized Rate
If return, or other portfolio performance statistic, is available for longer than one year, annualization is conversion of the numbers in order to get the yearly equivalent. Annualized numbers are comparable across different portfolios and instruments. Only periods...
Asset Allocation
Allocation is the process of dividing the portfolio by chosen classification, such as asset class, country, currency, sector etc. Individual securities are then selected within chosen segments.Allocation effect in portfolio attribution corresponds to the difference in...
Asset Allocation Software
The asset allocation dashboard shows an intuitive, visual breakdown of the assets in your portfolio. You can see both the absolute and relative allocation, as well as allocation trends over time. The table view provides additional statistics, such as long and short exposures and leverage.
Arbitrage Pricing Theory
Proposed by Stephen Ross in 1976, APT is an asset pricing model which expresses expected returns of a financial asset as a linear function of various market factors.