Glossary
Active Share:
Alpha:
The alpha of a mutual fund describes the difference between a fund’s actual return over a period of time and its expected return, given the fund’s level of risk. In this case, the risk profile of the fund is measured by the fund’s beta.
Basis Point:
Beta:
Book Value
The value of a security on the day of purchase or the acquisition value
Bottom Line:
Refers to a company’s net earnings, net income or earnings per share (EPS), which is usually the last line at the bottom of the page on a company’s income statement.
Capital Expenditure (CapEx):
Carbon Risk Rating (Sustainalytics):
Cash Flow:
The sum of the after-tax profit of a business plus depreciation and other non-cash charges.
CBOE Volatility Index:
Compound Annual Growth Rate (CAGR):
Correlation:
Debt to Capital:
A measurement of a company’s financial leverage, calculated as the company’s debt divided by its total capital.
Debt to EBITDA:
Discounted Cash Flow (DCF):
Dividend Yield:
Earnings Growth:
Earnings Per Share (EPS):
EBITDA:
“Earnings Before Interest, Taxes, Depreciation, and Amortization”
EBITDA to Interest:
EBITDA divided by cash interest expense is a measure used to assess credit quality.
Emissions/Revenue (USD):
Carbon intensity expressed as the issuer’s total carbon emissions per million USD of revenue as a proxy of the carbon efficiency per unit of output.
Environmental, Social and Governance (ESG):
Criteria are a set of non financial factors that can be used to evaluate an investment’s potential risk and opportunity.
Free Cash Flow
Is equal to the after-tax net income of a company plus depreciation and amortization less capital expenditures.
Gross Domestic Product (GDP):
Gross of Fees:
Is the total rate of return on an investment before the eduction of any fees or expenses.
Initial Public Offering (IPO):
Margin of Safety:
Market Capitalization:
Moody’s Credit Ratings (Source: Moody’s):
Price-to-Book (P/B) Ratio:
Price-to-Cash Flow (P/CF) Ratio:
Price-to-Earnings (P/E) Ratio:
Is a common tool for comparing the prices of different common stocks and is calculated by dividing the earnings per share into the current market price of a stock.
Price-to-Earnings (P/E) 10 Ratio:
A valuation measure, generally applied to broad equity indices, that uses real per-share earnings over a 10-year period. The P/E 10 ratio uses smoothed real earnings to eliminate the fluctuations in net income caused by variations in project margins over a typical business cycle. The P/E 10 ratio is also known as the Cyclically Adjusted Price Earnings (CAPE) ratio or the Shiller P/E ratio.
Price-to-Value Ratio:
Is the current stock price divided by our estimate of full value.
Quantitative Easing (QE):
Return on Equity (ROE):
Return on Invested Capital (ROIC):
Russell 1000 Growth Index
Russell 2000 Index:
The most commonly used benchmark for measuring the performance of small-cap stocks.
Russell 2500 Index:
Russell 3000 Value Index:
Russell Midcap Index:
Russell Midcap Value Index:
S&P 500 Index:
S&P Earnings and Dividend Rankings:
S&P 500 Growth Index:
SEC Yield:
Scope 1 Direct Emissions (tCO₂e):
Scope 2 Indirect Emissions (tCO₂e):
Sortino Ratio:
Standard & Poor’s Credit Ratings (Source: Standard & Poor’s):
Standard Deviation (Std Dev):
This statistical measurement of dispersion about an average, depicts how widely a mutual fund’s returns varied over a certain period of time. Investors use the standard deviation of historical performance to try to predict the range of returns that are most likely for a given fund. When a fund has a high standard deviation, the predicted range is wide, implying greater volatility.
10-Year U.S. Treasury Yield:
The return on investment, expressed as a percentage, on the U.S. government’s debt obligations. The higher the yields on 10-, 20-, and 30-year Treasuries, the better the economic outlook.
tCO₂e:
Top Line:
Is a reference to the gross sales or revenues of a company, which is usually the first line at the top of the page on a company’s income statement.
Turnover Ratio:
Of a mutual fund is a measurement that expresses the percentage of a particular fund’s holdings that have been replaced (turned over) during the previous year.
Upside/Downside Capture Ratios:
A measure of how well a manager was able to replicate or improve on phases of positive benchmark returns, and how badly the manager was affected by phases of negative benchmark returns.