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Talbot Reese publish free Financial Glossary

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PostPosted: Wed Oct 10, 2007 7:24 am    Post subject: Talbot Reese publish free Financial Glossary Reply with quote

Released on: October 10, 2007, 3:24 am

Press Release Author: Talbot Reese/Wayne E Talbot

Industry: Financial

Press Release Summary: At Talbot Reese we know first hand that early stage companies require a great deal of time and cultivation and that the real work begins after the investment. As a result, we limit the number of venture capital financing investments we make so that each company gets the attention it needs and deserves.

Press Release Body: Financial Glossary

12b-1 Fee: A fee assessed on certain funds or share classes to help cover the costs associated with marketing and selling the fund.

Active Management: An investment approach that seeks to outperform benchmark returns Alternatives: Investment strategy which looks at non-traditional asset classes such as Real Estate.

Asset Allocation: Investment strategy which seeks to lower overall risk in a portfolio through diversification across asset classes.

Asset Class: A type of investment strategy that concentrates in a type of securities such as Fixed Income, Equity, Emerging Markets, Asset Allocation and Alternatives.

Average Annual Return: The average performance return over a period of years taking into effect compounding.

Average Maturity: The remaining lifetime of all bonds in the portfolio, weighted by the amount of money invested in each bond fund.

Average Quality: Represents the market-weighted average of the quality of the portfolio's individual holdings.

Average Yield to Maturity: The weighted average internal rate of return of the bonds held, reflecting the reinvestment of coupon interest at the imputed rate, and the effect of embedded options.

Benchmark: A predetermined set of securities based on published indices or customized to suit an investment strategy to be used for performance comparison.

Beta: A measure of the relative volatility of a security or portfolio to the market's upward or downward movements. A beta greater than 1.0 identifies an issue or fund that will move more than the market, while a beta less than 1.0 identifies an issue or fund that will move less than the market.

Bond: A debt security issued by a government or corporation that pays the bondholder a stated rate of interest and repays the principal at the maturity date.

Bottom-up Investing: A management style that emphasizes the analysis of individual securities rather than broad economic trends.

Capitalization: The average market value of the securities held in a portfolio- defined as either Small (under $250 million), Core or Large (in excess of $1 billion)

Closed End Fund: A regulated investment company which issues a fixed amount of shares and are traded on a stock exchange.

Cumulative Returns: Total performance return on a product to date.

Currency Hedging: A technique used to offset the risks associated with the changing value of currency.

CUSIP: Identification numbers and codes assigned to securities for trading purposes. CUSIP stands for the Committee on Uniform Securities Identification Procedures.

Diversification: A method of portfolio allocation and management aimed at balancing risk and return by spreading investments among many different securities or sectors to reduce the risk of owning any single investment.

Dividend Yield: Annual rate of return on a common or preferred stock investment.

Domicile: A permanent legal residence and the country in which taxes are paid.

Duration: Measured in years is an approximate measure of the portfolio's sensitivity to a parallel shift in interest rates.

Emerging Markets: The financial markets of developing economies. Many Latin American, Eastern European and Asian countries are considered emerging markets.

Equity: Investment strategy that invests in stocks of companies

Expense Ratio: Percentage of fund assets (per share) paid for operating expenses including advisory feeds, 12b-1 fees, administrative fees and all other costs incurred by the fund. Expense ratios are quoted in the prospectus.

Fiscal YTD Turnover: Measures the percentage of securities within the portfolio that have changed since the beginning of the portfolio's fiscal year.

Fixed Income: Investment strategy that invests in a security that pays a fixed rate of return.

Geographic Exposure: The area in which the product concentrates the securities such as a country, region or global.

Global Exposure: Invests primarily in securities of companies of developed nations.

Growth Style: An investment style that seeks to identify stocks that tend to offer greater-than-average earnings growth and price momentum. Growth stocks typically trade at higher prices relative to earnings than value stocks, due to their higher expected earnings growth.

Index: A benchmark to measure performance against.

Information Ratio: This is the ratio of the excess annualized return against the tracking error. The higher the ratio, the better, as it reflects the extent to which the fund has outperformed the benchmark.

International Exposure: Invests primarily in securities of companies of developed nations excluding the United States.

Investment Grade Securities: Bonds with a rating of at least “BBB” by Standard & Poors.

Investment Objective: The goal which a product pursues. There is no assurance that the product’s investment objective will be achieved.

Investment Vehicles: Investment options that offer different levels of fees, service and minimums. Morgan Stanley Investment Management offers a range of investment vehicles such as mutual funds, closed-end funds, variable annuities and separate accounts.

Liquidity: The ease with which an asset can be turned into cash.

Market Value: The current price of an asset, as indicated by the most recent price at which the asset was traded on the open market.

Minimum Investment: The amount that is required to make an initial investment in a product. The minimum investment differs for each investment vehicle and share class.

Money Market Fund: Seeks to provide current income and maintain a stable net asset value of $1 per share by investing in short-term, high-grade securities. Investments in the fund are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

Mutual Fund: An investment company that invests the money of its shareholders in a (usually) diversified group of securities to achieve a specific objective over time.

Net Asset Value (NAV): The market value of a mutual fund share. The NAV is calculated by dividing the current value of the entire portfolio by the number of shares outstanding.

Open Ended Fund: A regulated investment company which provides a commingled investment portfolio to shareholders and offers shares on a continuous basis. Liquidity is provided directly through the fund by the fund issuing or retiring shares every day depending on whether there are net buyers or sellers. The number of shares outstanding may change each day.

Price/Book (P/B): The ratio of the sum of the market values of the companies whose shares are held in a portfolio to their aggregate book value (Common equity/Common shares outstanding).

Price/Cash Flow (P/CF) Ratio: The ratio of the sum of the market values of the companies whose shares are held in a portfolio to their aggregate reported cash flow.

Price/Equity (P/E): The "multiple" of earnings at which a stock is selling. The P/E ratio is calculated by dividing a stock’s current price by its current earnings per share.

Prospectus: The legal offering document for an investment in mutual funds, indicating details of terms, fees and changes.

Quality: The credit rating given to an individual security by a rating agency such as Moody's or Standard & Poor's.

Return on Equity: The last fiscal year earnings per share (EPS) divided by the last fiscal year net equity per share of common stock. ROE tells shareholders how effectually their money is being employed.

R Squared: A statistical measure of the degree to which two investments are related. Thus the R2 can explain the percentage of a portfolio's risk that is due to the market benchmark (systematic risk). The nearer to 1.0 the R2 is, the more closely the fund's risk is attributable to the market benchmark. R2 cannot exceed 1.0.

SEC 30 Day Subsidized Yield: Reflects some or all of the expenses that the advisor had voluntarily waived.

SEC 30 Day Yield: A measure that the Securities and Exchange Commission (SEC) has standardized for all mutual funds. It is the net investment income per share actually earned by a fund's investments during a one-month period. For money funds, the SEC yield is a seven-day average yield. SEC yield is expressed as an annualized percentage of a fund's maximum offering price.

SEDOL: Identification numbers and codes assigned to securities for trading purposes by the London Stock Exchange. SEDOL stands for the Stock Exchange Daily Official List number.

Share Class: Provides multiple purchase options to an investor and offer different investment minimums and fees. Share Classes differ between fund families.

Sharpe Ratio: The portfolio's excess return (relative to the risk free rate) divided by the standard deviation of the portfolio's excess return.

Standard Deviation: A statistical volatility measure indicating the dispersion of returns, representing the square root of the variance of data points from the mean.

Top-down investing: A management style that emphasizes the strength of various market sectors, industries or countries. Individual securities are then selected within the favoured sectors.

Tracking Error: Tracking error measures the standard deviation of the excess returns of a composite compared to its benchmark. This gives an indication of the volatility of a portfolio versus its benchmark. It does not show whether or not the portfolio manager added value to the return of a portfolio versus that of the market.

Value Style: An investment style that seeks to identify securities with below average price-to-earnings, price-to-book and price-to-cash flow relative to their peers that have attractive prospects for improved price performance. As a result, the stocks trade at prices below what value investors stocks are actually worth.

Variable Annuity: A tax-deferred investment that offers diversification, flexibility and important estate benefits with no contribution limits. Morgan Stanley Investment Management offers variable annuity products through the Universal Institutional Funds.

Weighted Average Market Capitalization: The weighted and adjusted arithmetic mean of the market cap (number of outstanding common shares of a given corporation multiplied by the latest price per share).

Weighted Median Market Capitalization: Value at which half of the market cap (number of outstanding common shares of a given corporation multiplied by the latest price per share) weight falls above and half below.

Yield: The percentage rate of return of the annual dividends paid on a stock, a bond, or a mutual fund.

Web Site:

Contact Details: Talbot and Reese, Inc.

Corporate Office:
Shinjuku Monolith, 16th Floor,
2-3-1 Nishi-Shinjuku, Shinjuku,
Tokyo 163-0916 Japan

Phone: +81-3-458-02055
Fax: +81-3-449-65096
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