Another name for smaller companies, as measured by their market capitalization. Our definition of a smaller company is one that has a market capitalization of less than US$500 million, which is still quite sizable by most standards. Usually a switch discount of up to 3% off the offer price is given.

Another name for stocks and shares but also applies to any approved or registered financial instrument, such as bonds.

A variation of the Sharpe ratio that differentiates harmful volatility from volatility in general using a value for downside deviation. The Sortino ratio is the excess return over risk-free rate over the downside semi-variance, so it measures the return to "bad" volatility. This ratio allows investors to assess risk in a better manner than simply looking at excess returns to total volatility, since such a measure does not consider how often the price of the security rises as opposed to how often it falls.

The Sharpe Ratio is a measure of reward for risk taken, where risk is measured in terms of volatility. The annualized fund return is compared with that of the annualized risk-free rate of return (historic 1 month cash rates), to calculate an average annualized excess return that is divided by the fund’s annualized volatility to give an excess return per unit of risk taken. The larger the sharp ratio, the better the fund has performed relative to its risk.

Refers to moving an investment (or part of it) out of one fund and into another. When you switch you sell at the bid price and buy units in the new fund at the offer price.

Supranational bonds are issued by organizations created by international treaties and backed by international governments, such as the IMF or World Bank.

Société d'Investissement Collectif à Capital Variable . This an open-ended investment fund of the corporate type frequently used in France and Luxembourg.

The spread is the term used to describe the difference between the offer price and the bid price.

An ownership share in the assets of a public limited company (PLC). Shares/equities can be purchased on stock exchanges.

Tracking error measures the standard deviation of relative returns, i.e. the fund return less the benchmark return. Tracking error is often used as a measure of risk taken against the fund benchmark with a larger tracking error indicating that greater risks were taken relative to the benchmark in achieving the return of the fund.

The combination of capital growth and reinvested income at the end of any given period. Total return performance figures are always stated on an offer-to-bid price basis.

Abbreviation for the United States Federal Reserve Bank, America's central bank and its equivalent to the Bank of England

A way of investing that means buying a range of investments that should grow at the same rate as a particular market. For example, this could mean buying shares in the 100 biggest companies listed on the London Stock Exchange. (See also Passive Investment Management)

Reflects the market's expectation of the future earnings of a company in relation to its current earnings; in other words, its performance potential.

Is a form of managed investment that passes stock market volatility back to the investor. Funds invested in a collection of shares, fixed interest securities, property and cash. Only available from life offices.

This ratio is the average of the differences between the price movements of the fund and those of the underlying benchmark. This measurement reveals to what degree a manager captures the market's moves, both up and down in a given period. A capture ratio is calculated by dividing the returns in a benchmark (e.g., S&P 500 or Russell 1000) over a period of time into two categories, positive returns and negative returns, and summing these amounts into total positive and negative returns. The manager's returns are aggregated in the corresponding positive and negative periods. To determine how much of the positive (upside) returns a manager captures, the manager's total return (in up markets) is divided by the index's total up period returns. The same principle is used for the down capture. An upside ratio greater than 1.00 means the manager is, on average, capturing more of the positive returns than the benchmark during these up periods. A ratio between 0.00 and 1.00 indicates that the manager is producing positive returns, but less than the benchmark. Conversely, the downside capture ratio demonstrates to what degree a manager is participating in down markets. A downside capture ratio less than O indicates that a fund produced positive returns during down markets.

Stands for Undertaking for Collective Investment in Transferable Securities which is a collective investment fund that complies with the EU UCITS Directive N° 85/611/EEC of 20 October 1985 (OJ L 375/3 of 31.12.1985) and consequently can be marketed in all EU countries.

A technique which uses the statistical analysis of historical market trends and volatilities to estimate the likelihood that a given portfolio's losses will exceed a certain amount.

The degree by which share prices in a particular stock market or sector go up or down. Usually measured by the movement in a particular index.

Investment trust companies can issue warrants which give holders the right but not the obligation, to buy shares in the company at a fixed price on a specific date or dates in the future. Warrants can fluctuate in value extremely rapidly because they reflect what is happening to a share at a fraction of its price. Whilst warrants have the potential for greater returns than ordinary shares, their market price is more volatile and there is a greater risk that warrants may become worthless.

Ex-dividend. This is the interval between the announcement and payment of the next dividend or, in the case of a unit trust, the income distribution. Someone who invests during the interval between two distributions and is not entitled to the dividend. With an income-paying unit trust, the 'xd' date is usually about eight weeks before its distribution date

The average return achieved on a bond capturing coupon and principal repayments, assuming that the bond is held to maturity and that the coupons received are reinvested at this same rate.

he amount of income an investment delivers after deduction of charges (but not tax) expressed as a percentage of the amount invested. Usually expressed as an annual figure - e.g. "the fund's estimated gross yield is 5.9% p.a." Yield to Maturity - The average return achieved on a bond capturing coupon and principal repayments, assuming that the bond is held to maturity and that the coupons received are reinvested at this same rate. (See also Bonds)
Source: http://www.jpmorganassetmanagement.dk