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Alpha |
A measure of a portfolio's expected performance versus its actual returns, taking into account the portfolio's level of risk as measured using beta. A positive alpha means the portfolio has performed better than its beta would predict and vise versa. |
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Beta |
A measurement of the difference between the performance of a stock and the performance of the market in general. |
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Blue Chip |
Stocks of well-known, large companies, that have a long and solid track record. |
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Capital Markets |
Encompasses the markets where bonds (debt) and stocks are traded. Does not include short-term (money market) instruments. |
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Common Stock |
Common shares of a company that represent ownership in that company. As a group, this class of shareholder can exercise control and enjoy any capital appreciation. However, in the case of liquidation, they are junior to all other classes of securities. |
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Diversification |
Spreading investment and, therefore, risk among different companies in different fields. |
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Dividends |
Distributions from a company in the form of money or securities. Dollar Cost Averaging An investment plan with regular purchases regardless of market direction. |
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Dow Jones Industrial Average (DJIA) |
There are three main Dow Jones averages. Industrials (30 stocks), Transportation (20 stocks) and Utilities (15 stocks). The DJIA is made up of all three (65 stocks). |
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Earnings Per Share (EPS) |
The amount of profit attributable to each share outstanding at year end. |
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Management Expense Ratio (MER) |
The ratio of annual expenses (fees, operating, etc) divided by the assets. |
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Growth Stocks |
A company (stock) that has shown good gains over the recent past with expectations of a continued trend upward. |
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Kurtosis |
Measures the degree of distribution from both sides of a "Bell Curve" For a risk-averse investor like the Van Arbor Funds, a low kurtosis is preferable (returns not far away from the mean). |
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Large Cap |
Large capitalization stocks generally have a market value greater than $ 4 billion in the US and $ 500 million in Canada. |
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Load |
A sales charge on the purchase or sale of some mutual funds. This charge is paid by the investor. |
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Mutual Fund |
An investment company that puts unit holders' money in various instruments, usually securities, and must redeem the units, upon request, at the NAV. |
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Net Asset Value (NAV) |
Net assets divided by the number of fund units outstanding. |
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No-Load |
Mutual Funds offered directly to the public at NAV with no sales commissions. The Van Arbor Funds are No-Load. |
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Offering Memorandum (OM) |
A legal document that discloses pertinent information concerning the issuer's operations, securities, management and purpose of the offering. The Offering Memorandum must be prepared in accordance with requirements of the securities regulators. This document is filed with, but not receipted by, securities regulators. Potential investors in securities offered by way of an Offering Memorandum are required to complete a Subscription Agreement. |
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Sortino Ratio |
A risk/return measurement to differentiate between good and bad volatility in the Sharpe Ratio. |
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Standard & Poor's 500 (S&P) |
A market capitalization-weighted index of 500 widely held US largest stocks. |
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Standard Deviation |
A statistical measurement of dispersion around an average or mean. |
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Systematic Withdrawal Investment Plan (SWIP) |
A systematic withdrawal investment plan from a mutual fund to create your own dividend payment plan. |
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Total Return |
Measures the total change in an investment. |
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Treynor Ratio |
Similar to the Sharpe Ratio except it uses beta rather than standard deviation. It measures the returns earned in excess of those that could have been earned on a risk less investment per unit of market risk assumed. |
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S&P/TSX Index |
The Toronto Stock Exchange Composite Index is a capitalization-weighted index designed to measure market activity. |
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Volatility |
A measure of risk based on the standard deviation of the asset return. |
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Wrap Account |
A type of client account with a Dealer, where the Dealer charges the client a flat quarterly or annual fee. The fee covers the administrative, trading and management expenses associated with the account. |
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