Glossary

Annualised performance	Performance of an investment over a given period of time, calculated as the average yearly(geometric) yield.
Benchmark	A group of securities or mutual funds with characteristics or investment objectives similar to those of the fund being evaluated. The performance of these indices is used as a benchmark to compare the performance of individual funds.
Beta	Relative measure of the sensitivity of an investment’s return to changes in the benchmark’s return.
Bond	Security issued by a corporation or public entity that entitles the holder to fixed annual interest payments until it is redeemed at maturity.
Correlation	Strength of the relationship between the distribution of returns of the fund and its benchmark. The coefficient of correlation is always between +1 (perfect positive correlation) and −1 (perfect negative correlation).
Dividend	Amount that is paid to the holder of a fund unit or share.
HP Share	“HP” shares seek to hedge most of the exchange-rate risk of the “P” shares against a given currency.
Index	An indicator of the performance of one or more markets. Indexes make it possible to compare a fund’s performance with the performance of the specific market where it is invested. The oldest and best known stock market index is the Dow Jones.
Information ratio	The ratio of the excess annualised return against the Tracking Error, over a fixed period of time. The higher the ratio, the better, as it reflects the extent to which a fund outperformed its benchmark per unit of active risk over the investment period.
Multi−class fund	Refers to certain funds that include several classes of stock in order to meet specific needs of different types of investors.
Net asset value (NAV)	Value of one unit of an investment fund or one share in a unit trust which is obtained by dividing the net assets in the fund by the total number of units or shares in circulation.
P Share	“P” shares are intended for private investors. These shares are not subject to any minimum investment.
Performance	Variation in the value of an investment over a given period of time, expressed as a percentage and accounting for any reinvested dividends or coupons and for any appreciation or depreciation in capital.
Reference currency	Currency in which the net asset value (NAV) of a fund is calculated.
Sharpe ratio	The annualised return per unit of risk over a fixed period of time. The higher the Sharpe Ratio, the better the portfolio was for an investor in terms of risk−adjusted return, over the investment period.
TER	The total expense ratio (TER) measures the total costs of a fund as proportion of its average size over the last 12 months. Costs primarily encompass management fees, custody fees and administrative expenses. Transaction costs are not taken into account in the TER calculation.
Tracking error	A ratio expressed as a percentage which measures the deviation of the return of a fund compared to the return of a benchmark over a fixed period of time. The more passively the investment fund is managed, the smaller the tracking error.
Volatility	Extent to which the price of a security fluctuates over a given time. The greater the fluctuation, the more the security or market is considered risky.
YTD (Year to date)	Measurement that represents the performance of a security or fund since the beginning of the current year, expressed as a percentage.