ACD Authorised Corporate Director ADR American Depository Receipt AGM Annual General Meeting AIF Alternative Investment Fund AIFM Alternative Investment Fund Manager AIM Alternative Investment Market AUM Assets under Management BCP Business Continuity Plan BNY Bank of New York Mellon CBA Commonwealth Bank of Australia CBI Central Bank of Ireland CFSGAM Colonial First State Global Asset Management CRM Client Relationship Manager CRIMS Charles River Investment Management System DB Defined Benefit DC Defined Contribution DST Delaware Statutory Trust EBITDA Earnings before Interest, Taxes, Depreciation, Amortisation EMEA Europe, Middle East, Africa EMIR European Market Infrastructure Regulation EPS Earnings per Share ERISA Employee Retirement Income Security Act ESG Environmental Social Governance ETF Exchange Traded Fund EV Enterprise Value FATCA Foreign Account Tax Compliance Act FCA Financial Conduct Authority FCF Free Cash Flow FMV Fair Market Value FMR Fund Manager Request FPI Foreign Portfolio Investor (India) FSI First State Investments FUM Funds under management FVP Fair Value Pricing GEM Global Emerging Markets GDR Global Depository Receipt IBD Investment Banking Division ICVC Investment Company with Variable Capital IFA Independent Financial Advisor IFRS International Financial Reporting Standards IMA Investment Management Agreement IPO Initial Public Offer IRR Internal Rate of Return ISIN International Securities Identification Number KIID Key Investor Information Document KYC Know Your Customer LIBOR London Interbank Offered Rate MIFID (1/2) Markets in Financial Instruments Directive MSCI Morgan Stanley Capital International (index) NAV Net Asset Value NED Non-Executive Director OCF Ongoing Charges Figure OEIC Open Ended Investment Company PAC Pacific Assets Trust PCP Portfolio Construction Parameters PDV Present Day Value PE ratio Price to Earnings ratio PIF Professional Investor Fund PLC Public Limited Company PV Present Value QE Quantitative Easing QIF Qualified Investors Fund RDR Retail Distribution Review RFP Request for Proposal RFI Request for Information ROE Return on Equity SEC Securities and Exchange Commission (US Regulator) SI Stewart Investors SFC Securities and Futures Commission of Hong Kong SFG Sustainable Funds Group SSgA State Street Global Advisors SWOT Strengths, Weaknesses, Opportunities, Threats TCF Treating Customers Fairly TER Total Expense Ratio TSR Total Shareholder Return UCITS Undertakings for Collective Investment in Transferable Securities VCC Variable Capital Company (the offshore Irish fund range) WW Worldwide WW/GEM Worldwide/Global Emerging Markets WWL Worldwide Leaders
Absolute Return The return that an asset achieves over a certain period of time. This measure looks at the appreciation or depreciation (expressed as a percentage) that an asset - usually a stock or a fund - achieves over a given period of time. Absolute return differs from relative return because it is concerned with the return of a particular asset and does not compare it to any other measure or benchmark. Alpha Risk-adjusted measure of the “excess return” on an investment – common measure of assessing active manager’s performance. Annuity Contract by which a financial institution e.g. insurance company agrees to provide a regular income for life (may be fixed or index linked). Basis Point A basis point is a unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form. Beta Statistical measure of the relative volatility of a stock, fund or other security in comparison to the market as a whole. Beta for the market is 1; stocks with beta above 1 are more responsive to the market and more risky; stocks with beta below 1 tend to move in the opposite direction of the market. For example, a stock with beta of 3 moves 30% if the market moves 10% - a stock with beta of 0.5 will move 5%. Bloomberg A major global provider of 24-hour financial news and information. Book value The value of an asset according its value on the balance sheet. Bond A security with a redemption date over a year later than its date of issue. It can be issued by firms, financial institutions, or governments. The bond may have a fixed redemption date, an option for the borrower to repay at any date over a period, or even be perpetual.A bond may carry fixed interest or variable interest with notice or can be linked to some financial index. Varies in its degree of risk. Government bonds are called ‘gilt-edged’ and regarded as very safe. Well established firms issue ‘investment-grade bonds’ which are also considered very safe. Financially adventurous firms issue ‘junk bonds’ with a non-negligible danger of default. Bonds are not always liquid assets and liability to price fluctuations diminishes as they approach maturity. Broker An individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. Commingled Fund A commingled fund is a fund consisting of assets from several accounts that are blended together. Investors in commingled fund investments benefit from economies of scale, which allow for lower trading costs per dollar of investment, diversification and professional money management. These types of funds are sometimes referred to as a "pooled funds." Within Stewart Investors only our US funds are referred to as ‘commingled’. Custodian A custodian is a financial institution that holds customers' securities for safekeeping to minimise the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form. Since they are responsible for the safety of assets and securities that may be worth hundreds of millions or even billions of dollars, custodians generally tend to be large and reputable firms. Derivative A tradable security whose value is derived from the actual or expected price of some underlying asset. Defined Benefit (DB) Provision of a pension scheme by which the benefits to be received by the pensioner do not depend on the financial performance of the pension fund. Defined Contribution (DC) Provision of a pension scheme by which the rules fix the contributions to the scheme by employers and employees. The benefits paid to the pensioners are determined by what can be afforded from the pension fund built up by these contributions. Risk of poor performance on the contributors. Disclosure The act of releasing all relevant information about a company that may influence an investment decision. In order to be listed on major US stock exchanges, companies must follow all of the Securities and Exchange Commission's disclosure requirements and regulations. Dividend A payment of income by a company to its shareholders. EV/EBITDA Metric for deriving the value of a business. Meaning Enterprise Value divided by Earnings Before Interest, Taxes, Depreciation and Amortization, it compares the value of a company, including debt and other liabilities to its actual earnings, not including non-cash assets. The resulting enterprise multiple can be used to compare one company to another within the same industry, since the calculation is independent of the capital structure of a company. A lower enterprise multiple may indicate that a company is undervalued. Feeder Fund A feeder fund is one of several funds that feed into an umbrella fund called the master fund, which oversees all portfolio investments and trading activity. The master fund's profits are split on a pro-rata basis among the feeder funds in proportion to their investment. Management and performance fees are also paid at the feeder fund's level. Hedge Fund Investment fund specialising in taking speculative positions in markets (for shares or currencies). Institutional clients Clients which have large pools of money. Our investment team decide where to invest their money. Examples of institutional clients include pension funds, investment companies and investment banks. Institutional clients can buy into pooled funds but can also have their own segregated funds. Interest Payment for a loan additional to repayment of the amount borrowed. Mutual Fund A pooled investment vehicle which invests in securities such as shares or bonds. Benefits include diversification and professional management. Overweight A position larger than the benchmark index weighting in a stock. Par/ Face/ Maturity value Amount issuer agrees to repay at date of maturity of a bond (most issued with par value of $1,000). Pooled Funds Also known as collective investment schemes – are a way of putting sums of money from many people into a large fund spread across many investments and managed by professionals. Investing this way can potentially be easier and less risky than buying shares in individual companies directly, and there are many funds to choose from. Price-to-book ratio (P/B ratio) A financial ratio used to compare a company’s current market price to its book value. It reflects how many times book value investors are ready to pay for a share. For example, if the share price is $10 and shareholders’ equity is $5, investors are happy to pay two times the book value. Rate of return The annual return on a loan as a percentage of its principle. Share A part of the ownership of a company. Sunset Clause A statute, regulation or similar piece of legislation that provides for an automatic repeal of the entire or sections of a law once a specific date is reached. Once the sunset provision date is reached, the pieces of legislation mentioned in the clause are rendered void. If the government wishes to extend the length of time for which the law in question will be in effect, it can push back the sunset provision date any time before it is reached. Tracking Error Amount by which the returns of a stock differs from the index. Segregated Mandate Separate fund managed by fund manager with a higher fee. PCP Portfolio Construction Parameters - single source of the parameters applicable to each fund, i.e. what a fund can and cannot hold and to what extent. Underweight A position less than the benchmark index weighting in a stock.