IMU Communications Financial Glossary

Index definitions

A benchmark index provides a standard against which the performance of a security, investment strategy, or investment manager can be measured.

The Bloomberg 1 Year Municipal Bond Index tracks the performance of bonds with a minimum credit rating of Baa3 from Moody’s Investors Service, are issued as part of a deal of at least $50 million, have an amount outstanding of at least $5 million, and have maturities of one to two years.

The Bloomberg 15-Year Municipal Bond Index tracks the performance of municipal bonds with maturities of 15 years.

The Bloomberg 20-Year Municipal Bond Index tracks the performance of municipal bonds with maturities of 20 years.

The Bloomberg 3-10 Year Quality Intermediate Municipal Blend Index tracks the performance of tax-exempt general obligation, revenue and private activity bonds and notes, which are issued by or on behalf of states, territories or possessions of the U.S. and the District of Columbia and their political subdivisions, agencies and instrumentalities with a remaining maturity of more than three years and less than 10 years. 

The Bloomberg 3-15 Year Quality Intermediate Municipal Blend Index tracks the performance of tax-exempt general obligation, revenue and private activity bonds and notes, which are issued by or on behalf of states, territories or possessions of the U.S. and the District of Columbia and their political subdivisions, agencies and instrumentalities with a remaining maturity of more than three years and less than 15 years. 

The Bloomberg 60/40 Bloomberg Municipal High Yield Index & Bloomberg Municipal Bond Index tracks the performance of a 60%/40% allocation to non-investment-grade and investment-grade municipal bonds, respectively.

The Bloomberg A+ U.S. Credit Index tracks the performance of publicly issued U.S. corporate and specified foreign debentures and secured notes that have at least one year to final maturity regardless of call features, have at least $250 million par amount outstanding, and are rated A-/A3 or higher by at least two of the three major credit-rating agencies (S&P Global Ratings, Fitch Ratings, and Moody’s Investor Service).

The Bloomberg California Intermediate Municipal Bond Index tracks the performance of bonds issued by California municipalities. 

The Bloomberg Commodity Index comprises futures contracts and tracks the performance of a fully collateralized investment in the index. 

The Bloomberg EM USD Sovereign Index tracks the performance of fixed-rate and floating-rate U.S. dollar-denominated sovereign debt issued by emerging-market countries. 

The Bloomberg Euro Aggregate Index is a broad-based flagship benchmark that tracks the performance of the investment-grade, euro-denominated, fixed-rate bond market, including treasuries, government-related, corporate and securitized issues. Inclusion is based on currency denomination of a bond and not country of risk of the issuer. 

The Bloomberg Floating Rate Asset-Backed Securities Index is the asset-backed securities (ABS) component of the Bloomberg U.S. Aggregate Index and tracks the performance of three subsectors: credit cards, auto loans and utility. The index comprises pass-through, bullet, and controlled amortization structures, and includes only the senior class of each ABS issue and the Employee Retirement Income Security Act (ERISA)-eligible B and C tranche (a slice or portion of a structured security).

The Bloomberg Global Aggregate Bond Index is a market capitalization-weighted index that tracks the performance of investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) fixed-income securities denominated in 13 currencies. The index reflects reinvestment of all distributions and changes in market prices. 

The Bloomberg Global Aggregate Credit Index tracks the performance of publicly issued corporate and foreign debentures and secured notes that meet specific maturity, liquidity, and quality requirements. 

The Bloomberg Global Aggregate ex-U.S. Hedged USD Index provides a broad-based measure of the performance of global investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) fixed-rate debt markets outside of the U.S., comprising the Bloomberg Pan-European Aggregate and Asian-Pacific Aggregate Indices, excluding the effects of foreign exchange movements relative to the U.S. dollar. 

The Bloomberg Global High Yield Index is a multi-currency flagship measure of the global high-yield debt market. The index comprises the Bloomberg U.S. High Yield, Pan-European High Yield, and Emerging Markets (EM) Hard Currency High Yield indexes.

The Bloomberg Global Treasury Index tracks fixed-rate, local currency government debt of investment grade countries, including both developed and emerging markets.

The Bloomberg GNMA Index tracks the performance of securitized mortgage pools backed by the Government National Mortgage Association (GNMA), a U.S. government-sponsored enterprise. 

The Bloomberg High Yield Municipal Bond Index tracks the performance of non-investment-grade and unrated U.S. dollar-denominated, fixed-rate, tax-exempt bond market within the United States and four other regions: Washington, D.C.; Puerto Rico; Guam; and the Virgin Islands. 

The Bloomberg Intermediate U.S. Aggregate Bond Index tracks the performance of U.S. securities in the Treasury, government-related, corporate and securitized sectors with a remaining maturity of less than 10 years. 

Bloomberg Long A+ U.S. Credit Index tracks the performance of highly rated corporate and international dollar-denominated bonds with a remaining maturity of 10 years or more.

The Bloomberg U.S. Long Government/Credit Index tracks the performance of all medium and larger public issues of U.S. Treasury, agency, investment-grade corporate, and investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) international dollar-denominated bonds with a remaining maturity longer than 10 years. 

The Bloomberg Long U.S. Credit Index, the long-term component of the Bloomberg U.S. Credit Index, tracks the performance of U.S. dollar-denominated investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) corporate debt and sovereign, supranational, local authority, and non-U.S. agency bonds with a remaining maturity equal to or greater than 10 years. The average maturity is approximately 20 years.

The Bloomberg Long U.S. Treasury Index tracks the performance of fixed-rate, nominal debt issued by the U.S. Treasury with remaining maturities of 10 years or more. 

The Bloomberg Massachusetts Intermediate Municipal Bond Index tracks the performance of bonds issued by Massachusetts municipalities. 

The Bloomberg Municipal Bond Index tracks the performance of investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) municipal bonds with a remaining maturity of one year or more. 

The Bloomberg Municipal High Yield Bond Index tracks the performance of non-investment-grade U.S. municipal securities with a remaining maturity of one year or more.

The Bloomberg New York Intermediate Municipal Bond Index tracks the performance of bonds issued by New York municipalities. 

The Bloomberg Pennsylvania Intermediate Municipal Bond Index tracks the performance of bonds issued by Pennsylvania municipalities. 

The Bloomberg Short U.S. Treasury Bill 9-12 Month Index tracks the performance of U.S. Treasury securities that have a remaining maturity between one and 12 months. 

The Bloomberg U.S. 1-3 Year Credit Bond Index tracks the performance of U.S. Treasury securities with a remaining maturity between one and three years.

The Bloomberg U.S. 10-Year Treasury Bellwether Total Return Index tracks the performance of on-the-run (most recently auctioned) U.S. Treasury notes with maturities of 10 years.

The Bloomberg U.S. ABS Index tracks the performance of asset-backed securities (ABS) with the following collateral types: credit card, auto, and utility loans. All securities in the index have an average life (the length of time the principal of a debt issue is expected to be outstanding) of at least one year.

The Bloomberg U.S. Agency Index tracks the performance of the agency sector of the U.S. government bond market.

The Bloomberg U.S. Aggregate Bond Index tracks the performance of U.S. securities in the Treasury, government-related, corporate, and securitized sectors. It includes securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $250 million.

The Bloomberg U.S. Corporate High Yield Index tracks the performance of fixed-rate, publicly issued, non-investment-grade (rated BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service) bonds.

The Bloomberg U.S. Corporate Investment Grade Index is a broad-based benchmark that tracks the performance of the investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service), fixed-rate, taxable corporate bond market. 

The Bloomberg U.S. Credit Index tracks the performance of U. S. investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) corporate bonds. 

The Bloomberg U.S. High Yield Loan Index tracks the performance of high-yield (below-investment-grade) loans.

The Bloomberg U.S. Intermediate Government/Credit Index tracks the performance of the non-securitized component of the Bloomberg U.S. Aggregate Index. It includes investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service), U.S. dollar-denominated, fixed-rate Treasurys, government-related and corporate securities with maturities of 1 to 9.99 years. 

The Bloomberg U.S. Long Corporate Index tracks the performance of U.S. dollar-denominated, investment-grade, fixed-rate, taxable securities issued by industrial, utility, and financial companies, with maturities greater than 10 years.

The Bloomberg U.S. Long Government/Credit Index tracks the performance of all medium and larger public issues of U.S. Treasury, agency, investment-grade corporate, and investment-grade (rated BBB- or higher by S&P Global Ratings/Fitch Ratings or Baa3 or higher by Moody’s Investors Service) international dollar-denominated bonds with a remaining maturity longer than 10 years.

The Bloomberg U.S. Long Government Index tracks the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury with maturities of greater than 10 years. 

The Bloomberg U.S. Mortgage Backed Securities Index tracks the performance of fixed-rate agency mortgage-backed securities (MBS) guaranteed by the Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA), and Freddie Mac (FHLMC).

The Bloomberg U.S. Short Treasury Index is an unmanaged index that measures the performance of U.S. Treasury securities that have a remaining maturity between one and 12 months.

The Bloomberg U.S. Treasury Index tracks the performance of U.S. dollar-denominated, fixed-rate, nominal debt issued by the U.S. Treasury. 

The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) 0–5 Years Index tracks the performance of U.S. Treasury Inflation-Protected Securities (TIPS) with maturities of less than five years.

The Bloomberg U.S. Treasury Inflation-Protected Securities (TIPS) 1–5 Years Index tracks the performance of U.S. Treasury Inflation-Protected Securities (TIPS) with maturities between one and five years.

The Bloomberg U. S. Treasury Inflation-Protected Securities (TIPS) Index tracks the performance of U.S. Treasury Inflation-Protected Securities (TIPS) with maturities of at least one year and with at least $250 million par amount outstanding.  

The Bloomberg World Government Inflation Linked Bond Index tracks the performance of investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service), government inflation-linked debt from 12 developed-market countries.

The Broad Trade-Weighted U.S. Dollar Index (also known as theNominal Broad U.S. Dollar Index or “broad index”) is a measure of the value of the U.S. dollar relative to the currencies of a broad group of major U.S. trading partners. 

The Cboe Volatility Index (VIX) measures the constant 30-day expected volatility of the U.S. stock market using real-time, mid-quote prices of S&P 500 Index call and put options.. 

The Citigroup Economic Surprise Index measures the degree to which a core set of economic data series has been coming in under expectations, at expectations, or over expectations. 

The Commodity Research Bureau’s Spot Index (CRB Spot Index)  tracks the performance of 22 commodities that typically are among the first influenced by changes in economic conditions. 

The Composite Purchasing Managers Index combines the results of manufacturing and services sector purchasing managers’ indexes (PMIs) to provide a comprehensive overview of economic activity. PMIs track the prevailing direction of economic trends in the manufacturing and service sectors.

The Conference Board’s Leading Economic Index® is designed to signal peaks and troughs in the business cycle in the U.S. The index is composed of 10 economic components whose changes tend to precede changes in the overall U.S. economy.

Consumer-price indexes measure changes in the price level of a weighted-average market basket of consumer goods and services purchased by households. A consumer price index is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.

The Core Personal Consumption Expenditure Price Index (Core PCE Price Index) is the Federal Reserve’s (Fed) preferred measure of inflation as it excludes the volatile categories of energy and food prices to reveal underlying trends. 

The COVID-19 Stringency Index is a composite measure based on nine indicators including school closures, workplace closures, and travel bans. A score of 1 is the least restrictive status.

The CRB BLS Spot Market Price Index tracks the performance of more than 20 commodities viewed as among the first influenced by changes in economic conditions.

Datastream indexes track the performance of over 100,000 active equities plus over 103,000 inactive equities covering 100 developed and emerging markets with over 200 fields, including prices, volumes, market capitalization, earnings, and dividend and corporate action data, plus classification data based on the Brazil Commodities Index (ICB). 

A diffusion index measures how many indicators are pointing up and how many are pointing down.

The Dow Jones Industrial Average (“the Dow”)is a price-weighted average of 30 large, publicly traded stocks listed on stock exchanges in the U.S.

The Dow Jones Wilshire Real Estate Securities Index (RESI) tracks the performance of the U.S. real estate market and includes both real estate investment trusts (REITs) and real estate operating companies (REOCs). The RESI is weighted by float-adjusted (i.e., including only shares that are available for public trading) market capitalization.

The Federal Reserve (the Fed) is the central bank of the United States.

The FTSE 100 Index tracks the performance of shares from the 100 largest companies listed on the London Stock Exchange.

The FTSE 250 Index tracks the performance of shares from the 250 largest companies listed on the London Stock Exchange. 

The FTSE Actuaries UK Index-Linked Gilts up to 5 Years Index comprises securities with maturities of five years or less from the index-linked family of the FTSE Actuaries UK Gilts Index Series, which includes all British Government Securities quoted on the London Stock Exchange. 

The FTSE All Share Index represents 98-99% of U.K. equity market capitalization. The Index aggregates the FTSE 100, FTSE 250 and FTSE Small Cap Indices. 

The FTSE Canada 20+ Bond Index series is designed to be a broad measure of the long-term Canadian investment-grade fixed-income market where the effective term for all issues is 20 years or more.

The FTSE Canada 30-Day Treasury Bill Index is a sub-index within the FTSE Canada Treasury Bill Index.

The FTSE Canada Long Term Corporate Bond Index consists of semi-annual pay fixed-rate corporate bonds denominated in Canadian dollars, with an effective term-to-maturity greater than 10 years. Each security in the index is weighted by its relative market capitalization and rebalanced on a daily basis.

The FTSE Canada Long Term Federal Non-Agency Bond Index consists of semi-annual pay fixed-rate federal bonds excluding agency/crown corporations denominated in Canadian dollars, with an effective term-to-maturity greater than 10 years. Each security in the index is weighted by its relative market capitalization and rebalanced on a daily basis. 

The FTSE Canada Short Corporate Bond Index is a sub-index within the FTSE Canada Universe Bond Index that holds corporate bonds with maturities of five years and under.

The FTSE Canada Short Term Overall Bond Index is a sub-index within the FTSE Canada Universe Bond Index intended to represent the Canadian short-term bond market. It contains bonds with remaining effective terms greater than or equal to one year and less than or equal to five years.

The FTSE Canada Strip Bond Index is designed to reflect the performance of the Canadian strip market. A strip bond is created from existing conventional bonds by a trustee who, following deposit of the bond, separates each of the coupon payments, as well as the principal payment, from one another. Following the stripping process, each cash flow (piece of the original bond) can trade and is registered as a separate security, allowing the holder to receive a single known payment on a specific date.

The FTSE Canada Treasury Bill Index series consists of benchmarks to track the performance of Government of Canada Treasury Bills, with separate indexes for 1-month, 2-month, 3-month, 6-month, and 1-year Treasury bills (T-Bills). Each index is designed to reflect the performance of a portfolio that only owns a single security, the current on-the-run T-Bill for the relevant term, switching into the new T-Bill at each auction.

The FTSE Canada Universe Bond Index comprises a series of benchmarks designed to track the performance of the bonds denominated in Canadian dollars.

The FTSE Canada Universe Overall Bond Index comprises a series of benchmarks designed to track the performance of the bonds denominated in Canadian dollars.

The FTSE Nareit All Equity REITs Index is a free-float adjusted (i.e., including only shares that are available for public trading), market capitalization-weighted index of U.S. equity REITs.

The FTSE EPRA Nareit Developed Index tracks the performance of listed real estate companies and REITS worldwide. Index constituents are free float-adjusted (i.e., including only shares that are available for public trading), and liquidity, size and revenue screened.

The FTSE EPRA/Nareit North America Index tracks the performance of listed real estate companies and REITS in North American markets (U.S. and Canada). Index constituents are free float-adjusted (i.e., including only shares that are available for public trading), and liquidity, size and revenue screened.

The FTSE Russell Small Cap Completeness Index tracks the performance of the Russell 3000 Index companies excluding S&P 500 constituents. The index is constructed to provide a comprehensive and unbiased barometer of the extended broad market beyond the S&P 500 exposure. 

The FTSE TMX Canada Long Term Bond Index is a market capitalization-weighted index which tracks the performance of Canadian dollar-denominated bonds issued by the Canadian government or Canada-domiciled companies that have maturities of over 10 years.

The FTSE TMX Canada Universe Bond Index tracks the performance of investment-grade (rated BBB- or higher by S&P Global Ratings, Fitch Ratings and DBRS, or Baa3 or higher by Moody’s Investors Service) Canadian dollar-denominated government and corporate bonds issued by the Canadian government or Canada-domiciled companies.

The FTSE World Government Bond Index (WGBI) tracks the performance of fixed-rate, local currency, investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service) sovereign bonds. The WGBI is a widely used benchmark that currently includes sovereign debt from over 20 countries, denominated in a variety of currencies.

The Global Supply Chain Pressure Index (GSCPI) is a measure developed by the Federal Reserve Bank of New York to gauge global supply chain condition. It combines data from various sources, including transportation costs, manufacturing indicators, and inventory levels. 

The Harmonised Index of Consumer Prices (HICP) is a common measure of inflation across the eurozone designed to track consumer prices and used by the European Central Bank to monitor inflation. It is “harmonised” because all the countries in the European Union follow the same methodology, which ensures that the data for one country can be compared with the data for another.

The HFRX Equity Hedge Index measures the performance of the hedge fund market. Equity hedge strategies maintain positions both long and short in primarily equity and equity derivative securities.

The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe. It comprises all eligible hedge fund strategies, including but not limited to convertible arbitrage; distressed securities; equity hedge; equity market neutral; event driven; macro; merger arbitrage; and relative value arbitrage.

The HFRX Merger Arbitrage Index tracks the performance of strategies which employ an investment process primarily focused on opportunities in equity and equity-related instruments of companies which are currently engaged in a corporate transaction. 

The ICE BofA 1-3 Year Municipal Securities Index tracks the performance of tax-exempt investment-grade debt (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service) with maturities of one to three years publicly issued by U.S. states, territories and their political subdivisions.

The ICE BofA 1-3 Year U.S. Treasury Index tracks the performance of the direct sovereign debt of the U. S. government with a maturity of at least one year and less than three years. 

The ICE BofA U.S. 3-Month Treasury Bill Index tracks the performance of U.S. Treasury bills with maturities of 90 days. 

The ICE BofA 3-5 Year U.S. Treasury Index tracks the performance of U.S, Treasurys with maturities between three and five years. 

The ICE BofA Core Fixed Rate Preferred Securities Index tracks the performance of fixed-rate, U.S. dollar-denominated, investment-grade exchange-traded preferred securities issued in the U.S. domestic market.

The ICE BofA High Yield Constrained Index is a market value-weighted index of all domestic and Yankee high-yield bonds, including deferred interest bonds and payment-in-kind securities, with maturities of one year or more and a credit rating of BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service, but are not in default. 

The ICE BofA High Yield Index tracks the performance of U.S. dollar-denominated below-investment-grade (rated BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service) corporate debt publicly issued in the U.S. domestic market.   

The ICE BofA Municipal Master Index tracks the performance of tax-exempt investment-grade debt (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service) publicly issued by U.S. states, territories and their political subdivisions based on the mix of these bonds in the market.

The ICE BofA Sterling Non-Gilt Index tracks the performance of sterling-denominated, investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service), non-sovereign debt publicly issued in the eurobond or U.K. domestic markets, including quasi-government, corporate, securitized and collateralized securities. 

The ICE BofA UK Gilt Index tracks the performance of sterling-denominated sovereign debt publicly issued by the U.K. government in the U.K. domestic market with maturities of at least one month. 

The ICE BofA U.S. Corporate Index includes publicly issued, fixed-rate, nonconvertible investment-grade (rated BBB- or higher by S&P Global Ratings and Fitch Ratings or Baa3 or higher by Moody’s Investors Service) dollar-denominated, U.S. Securities and Exchange (SEC)-registered corporate debt having at least one year to maturity.

The ICE BofA USD 3-Month Deposit Offered Rate Constant Maturity Index is based on the assumed purchase of a synthetic instrument having three months to maturity and with a coupon equal to the closing quote for 3-month LIBOR. That issue is sold the following day (priced at a yield equal to the current day closing 3-month LIBOR rate) and is rolled into a new 3-month instrument. Therefore, the index will always have a constant maturity equal to exactly three months.

The ICE BofA USD 3-Month Libor Constant Maturity Index is based on the assumed purchase of a synthetic instrument with three months to maturity and with a coupon equal to the closing quote for the three-month London Interbank Offered Rate (Libor), which is the average interest rate at which a selection of banks on the London money market are prepared to lend funds denominated in a given currency to each other. That issue is sold the following day (priced at a yield equal to the current day closing three-month Libor rate) and is rolled into a new three-month instrument. Therefore, the index will always have a constant maturity equal to exactly three months. 

The ICE BofA U.S. High Yield Constrained Index is a market capitalization-weighted index which tracks the performance of U.S. dollar-denominated below-investment-grade (rated BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service) corporate debt publicly issued in the U.S. domestic market. 

The ICE BofA U.S. High Yield Index is an unmanaged index that tracks the performance of U.S. dollar-denominated, below- investment-grade (rated BB+ or lower by S&P Global Ratings and Fitch Ratings or Ba1 or lower by Moody’s Investors Service) corporate debt publicly issued in the U.S. domestic market. 

The iMoneyNet First Tier Institutional category includes only non-government institutional funds that do not hold any second-tier securities. Portfolio holdings of first-tier funds (rated by at least two nationally recognized statistical rating organizations in the highest short-term rating category) include U.S. Treasurys, repurchase agreements, time deposits, domestic bank obligations, foreign bank obligations, first-tier commercial paper, floating-rate notes and asset-backed commercial paper. It is not possible to invest directly in an iMoneyNet category. 

The iMoneyNet First Tier Retail category includes non-government retail funds that do not hold any second-tier securities. Portfolio holdings of first-tier funds (rated by at least two nationally recognized statistical rating organizations in the highest short-term rating category) include U.S. Treasurys, repurchase agreements, time deposits, domestic bank obligations, foreign bank obligations, first-tier commercial paper, floating-rate notes and asset-backed commercial paper. It is not possible to invest directly in an iMoneyNet category. 

The iMoneyNet Government & Agencies Institutional category includes the most broadly based of the government institutional funds. These funds may invest in U.S. Treasurys, U.S. government agency securities, repurchase agreements, or government-backed floating-rate notes. 

The iMoneyNet Tax-Free Institutional Index is an average of all tax-free and municipal, U.S.-domiciled institutional money market funds. The performance of the average does not reflect the deduction of expenses associated with a fund, such as investment management fees.

The iMoneyNet Tax-Free National Retail category includes all retail national and state tax-free and municipal money funds. Portfolio holdings of tax-free funds include rated and unrated demand notes, rated and unrated general market notes, commercial paper, put bonds (which allow the bondholder to require the issuer to repurchase the security at specified dates before maturity) with maturities of six months and less, put bonds with maturities over six months, alternative minimum tax paper, and other tax-free holdings. The category comprises all funds in the National Tax-Free Retail and State-Specific Retail categories. 

The iMoneyNet Treasury & Repo Institutional category includes only institutional government funds that hold U.S. Treasurys and repurchase agreements backed by the U.S. Treasury. 

The iMoneyNet Treasury & Repo Retail category comprises retail government funds that hold U.S. Treasurys and repurchase agreements backed by the U.S. Treasury. 

The Institute for Supply Management (ISM®) New Orders Index tracks new-order volumes for 18 manufacturing industries in the U.S.

The J.P. Morgan Collateralized Loan Obligation Index (CLOIE) is the total return benchmark for broadly syndicated arbitrage U.S. CLO debt. The index comprises U.S. dollar-denominated broadly syndicated arbitrage CLOs.

The J.P. Morgan EMBI Global Diversified Index tracks the performance of external debt instruments (including U.S. dollar-denominated and other external-currency-denominated Brady bonds, loans, eurobonds, and local market instruments) in the emerging markets. 

The J.P. Morgan Emerging Markets Bond Index is a total return, trade-weighted index for U.S. dollar-denominated emerging-market bonds, including sovereign debt, quasi-sovereign debt, Brady bonds, loans, and Eurobonds. 

The J.P. Morgan GBI-EM Global Diversified Index tracks the performance of local-currency bonds issued by emerging-market governments. 

The J.P. Morgan Government Bond Index - Emerging Markets (GBI-EM) Global Diversified Index tracks the performance of debt instruments issued in domestic currencies by emerging-market governments.

The J.P. Morgan Nominal Broad Effective Exchange Rate Index is a weighted average of bilateral exchange rates that measures the value of a country’s currency in terms of its trading partners’ currencies.

The J.P. Morgan U.S. Liquid Index tracks the performance of the most liquid securities in the U.S. investment-grade corporate bond market, tracking high-grade securities across a universe of sectors and subsectors.

The KBW Nasdaq Bank Index tracks the performance of the 24 largest publicly traded U.S. regional banks, national money centers, and thrifts. 

The KBW Regional Banking Index tracks the performance of U.S. regional banks and thrifts that are publicly traded in the U.S. 

The LME Copper Spot Price tracks the price of copper traded on the London Metals Exchange.

The Markit CDX North American Investment Grade Index comprises 125 of the most liquid North American bonds with investment grade-credit ratings that trade in the credit default swap (CDS market). A CDS is a contract that transfers third-party credit risk from one party to another. 

The Merrill Option Volatility Estimate (MOVE) Index, an indicator of investors’ uncertainty and risk-aversion, measures the implied yield volatility of a basket of one-month over-the-counter options on two-, five-, 10-, and 30-year U.S. Treasurys.

The MSCI ACWI is a market capitalization-weighted index that tracks the performance of over 2,000 companies, and is representative of the market structure of 48 developed and emerging-market countries in North and South America, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars. 

The MSCI ACWI Commodity Producers Index captures the global opportunity set of commodity producers in the energy, metal and agricultural sectors. Constituents are selected from the equity universe of MSCI All-Country World Index (ACWI), the parent index, which tracks the performance of mid- and large-cap securities across developed- and emerging-markets countries. 

The MSCI ACWI ex USA Index tracks the performance of both developed- and emerging-market countries, excluding the United States. 

The MSCI All Shares China Index tracks the performance of large and mid-cap representation across China A‐shares, B‐shares, H‐shares, Red‐chips, P‐chips and foreign listings (e.g., ADRs). The index seeks to reflect the opportunity set of China share classes listed in Hong Kong, Shanghai, Shenzhen, and outside of China.

The MSCI Australia Index tracks the performance of the large and mid-cap segments of the Australia market. With 59 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Australia.

The MSCI Brazil Index tracks the performance of the large- and mid-cap segments of the Brazilian market. The index’s 60 constituents comprise about 85% of the Brazilian equity universe.

The MSCI Canada Index tracks the performance of the large- and mid-cap segments of the Canada equity market.

The MSCI China Index tracks the performance of large- and mid-cap stocks in China. The index’s 151 constituents, comprise about 85% of the China equity universe.

The MSCI EAFE Index is a market capitalization-weighted equity index that tracks the performance of the developed world outside North America. 

The MSCI Emerging + Frontier Markets Index is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of large- and mid-cap stocks across 23 emerging-market countries and 24 frontier-market countries.

The MSCI Emerging Markets Asia Index tracks the performance of large- and mid-cap stocks representing approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization of China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.

The MSCI Emerging Markets Europe Index is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of large- and mid- cap representation across 14 developed-market countries in Europe.

The MSCI Emerging Markets Europe and Middle East Index tracks the performance of large- and mid-cap stocks representing approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization of the Czech Republic, Greece, Kuwait, Hungary, Poland, Qatar, Turkey and United Arab Emirates.

The MSCI Emerging Markets Index is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of emerging-market equities. 

The MSCI Emerging Markets Latin America Index is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of large- and mid-cap stocks across five emerging markets countries in Latin America. 

The MSCI EMU Index (European Economic and Monetary Union) captures large and mid-cap representation across the 10 Developed Markets countries in the EMU.

The MSCI Europe ex UK Index is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of large- and mid- cap stocks across 14 developed-market countries in Europe. The Index comprises approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization across European developed markets excluding the U.K.

The MSCI Europe Growth Index tracks the performance of large- and mid-cap stocks exhibiting overall growth style characteristics across 15 developed-market countries in Europe. 

The MSCI Europe Index tracks the performance of large- and mid-cap stocks across 15 developed-market countries in Europe.

The MSCI Europe Value Index tracks the performance of large- and mid-cap stocks exhibiting overall value style characteristics across 15 developed-market countries in Europe. 

The MSCI Frontier Emerging Markets Index is a free float-adjusted (i.e., including only shares that are available for public trading), market capitalization-weighted index that tracks the performance of stocks in 32 frontier emerging-market countries. The index includes 129 constituents, comprising about 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in each country.

The MSCI Frontier Markets Index tracks the performance of large- and mid-cap stocks across 28 frontier-market countries.  The index includes 98 constituents comprising about 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in each country.

The MSCI Germany Index measures the performance of the large and mid-cap segments of the German market. With 56 constituents, the index covers about 85% of the equity universe in Germany.

The MSCI Hong Kong Index tracks the performance of the large- and mid-cap segments of the Hong Kong market. With 33 constituents, the index covers approximately 85% of the free float-adjusted market capitalization of the Hong Kong equity universe.

The MSCI India Index tracks the performance of the large- and mid-cap segments of the Indian equity market. The index’s 109 constituents comprise approximately 85% of the Indian equity universe.

The MSCI Japan Index tracks the performance of the large- and mid-cap segment of the Japanese equity market. The index’s 237 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in Japan. 

The MSCI Mexico Index tracks the performance of the large- and mid-cap segments of the Mexican equity market. The index’s 23 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in Mexico.

The MSCI Nordic Countries Index tracks the performance of large= and mid-cap stocks across four developed-market countries in Europe (Denmark, Sweden, Finland, and Norway).

The MSCI North America Index tracks the performance of the large- and mid-cap segments of the U.S. and Canada markets. With 712 constituents, the index covers approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in the U.S. and Canada.

The MSCI Pacific ex Japan Index tracks the performance of large- and mid-cap sticks across four of five developed-market countries in the Pacific region (excluding Japan).

The MSCI Pacific Index tracks the performance of large- and mid-cap stocks across five developed-market (DM) countries in the Pacific region.

The MSCI Russia Index tracks the performance of the large- and mid-cap segments of the Russian equity market. The index’s 10 constituents, the index comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in Russia.

The MSCI South Africa Index tracks the performance of the large- and mid-cap segments of the South African equity market. The index’s 37 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in South Africa.

The MSCI Turkey Index tracks the performance of the large- and mid-cap segments of the Turkish equity market. The index’s 12 constituents comprise about 85% of the equity universe in Turkey. 

The MSCI United Kingdom Index measures the performance of the large and mid-cap segments of the U.K. market. With 78 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in the U.K.

The MSCI USA Index tracks the performance of the large- and mid-cap segments of the U.S. equity market. The index’s 624 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in the U.S.

The MSCI World ex USA Index tracks the performance of the large- and mid-cap segments of equity markets across 22 of 23 developed- market countries--excluding the U.S. The index’s 887 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in each country. 

The MSCI World Index tracks the performance of the large- and mid-cap segments of equity markets across 23 developed-market countries. The index’s 1,517 constituents comprise approximately 85% of the free float-adjusted (i.e., including only shares that are available for public trading) market capitalization in each country.

The MSCI World Information Technology Index tracks the performance of large- and mid-cap segments of the information technology sector across 23 developed-market countries. 

The MSCI World Minimum Volatility Index seeks to reflect the performance characteristics of a minimum variance strategy applied to the MSCI large- and mid-cap equity universe across 23 developed-market countries. The index historically has exhibited lower beta (a quantitative measure of the volatility relative to a specific benchmark) and volatility characteristics relative to the MSCI World Index, its parent index. 

The Nasdaq 100 Index is a market capitalization-weighted index that tracks the performance of the 100+ largest U.S. and international non-financial companies listed on the Nasdaq Stock Market.

The Nasdaq Composite Index is a market capitalization-weighted index that tracks the performance of all domestic and international companies listed on the Nasdaq Stock Market. Technology stocks comprise nearly 50% of the index’s weighting. 

The National Financial Conditions Index, provided by the Federal Reserve Bank of Chicago, tracks 105 measures of U.S. financial conditions in money markets, debt and equity markets, and the traditional and "shadow" banking systems (financial institutions that provide similar services to those of banks but are subject to little or no regulatory oversight). Positive values for the index indicate that financial conditions are tighter than average, while negative values indicate financial conditions that are looser than average.

The NCREIF Open End Diversified Core Equity Index is an index of investment returns of the largest private real estate funds pursuing lower risk investment strategies utilizing low leverage, and generally represented by equity ownership positions in stable U.S. operating properties diversified across regions and property types.

The NCREIF Property Index (NPI) is a quarterly time series composite total rate of return measure of investment performance of a very large pool of individual commercial real estate properties acquired in the private market for investment purposes only. All properties in the NPI have been acquired, at least in part, on behalf of tax-exempt institutional investors–the great majority being pension funds. As such, all properties are held in a fiduciary environment.

The Nikkei 225 Index is a price-weighted index (i.e., each company comprises a percentage of the total index proportional to its share price)that tracks the performance of 225 stocks listed on the Tokyo Stock Exchange Prime Market.

The personal-consumption-expenditures (PCE) price index measures the prices that consumers pay for goods and services to reveal underlying inflation trends. The core PCE price index, the primary inflation monitor used by the Federal Reserve, excludes volatile food and energy prices. 

The producer-price index tracks the average change over time in selling prices received by domestic producers of goods and services. 

A purchasing managers’ index (PMI) tracks the prevailing direction of economic trends in the manufacturing and service sectors.

The Russell 1000 Growth Index tracks the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with relatively higher price-to-book ratios and higher forecasted growth values. 

The Russell 1000 Index tracks the performance of 1000 of the largest U.S. equity securities based on market capitalization. The index is a subset of the Russell 3000 Index, which comprises the 3,000 largest U.S. companies, and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership. 

The Russell 1000 Low Volatility Total Return Index tracks the performance of the Russell 1000 Low Volatility Index, including capital gains, dividends and other distributions. The index is designed to deliver exposure to low-volatility, large-cap stocks in the Russell 1000 Index, which tracks the performance of 1,000 of the largest U.S. equity securities based on market capitalization.

The Russell 1000 Value Index tracks the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with relatively lower price-to-book ratios and lower expected growth values. 

The Russell 2000 Growth Index tracks the performance of the small-cap growth segment of the U.S. equity market. It includes those Russell 2000 Index companies with relatively higher price-to-value ratios and higher forecasted growth values. 

The Russell 2000 Indextracks the performance of the small-cap segment of the U S. equity market. The index is a subset of the Russell 3000 Index, which comprises the 3,000 largest U.S. companies, and includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership.

The Russell 2000 Value Index tracks the performance of the small-cap value segment of the U.S. equity market. The index includes those Russell 2000 Index companies with relatively lower price-to-book ratios and lower forecasted growth values. 

The Russell 2500 Growth Index tracks the performance of the small- to mid-cap growth segment of the U.S. equity market. The index includes those Russell 2500 Index companies with relatively higher price-to-book ratios and higher forecasted growth values. 

The Russell 2500 Index tracks the performance of the small- to mid-cap segment of the U.S. equity universe, commonly referred to as "smid" cap. The index is a subset of the Russell 3000 Index, which comprises the 3,000 largest U.S. companies representing approximately 96% of the investable U.S. equity market and includes approximately 2,500 of the smallest companies based on a combination of their market cap and current index membership.

The Russell 2500 Value Index tracks the performance of the small- to mid-cap value segment of the U.S. equity market. It includes those Russell 2500 Index companies with relatively lower price-to-book ratios and lower forecasted growth values. 

The Russell 3000 Index tracks the performance of the 3,000 largest U.S. companies representing approximately 98% of the investable U.S. equity market. 

The Russell Midcap Index, a subset of the Russell 1000 Index, tracks the performance of the mid-cap segment of the U.S. equity market and includes approximately 800 of the smallest companies based on a combination of their market capitalization and current index membership. The Russell 1000 Index tracks the performance of 1000 of the largest U.S. companies based on market capitalization.

The Russell Small Cap Completeness Index measures the performance of the companies in the Russell 3000 Index excluding the companies in the S&P 500 Index.

The S&P 400 Index is a market capitalization-weighted index that tracks the performance of the mid-cap segment of the U.S. equity market.

The S&P 500 Index is a market-weighted index that tracks the performance of the 500 largest publicly traded U.S. companies and is considered representative of the broad U.S. stock market. 

The S&P 500 Dividend Aristocrats is an equal-weight index that measures the performance of S&P 500 Index constituents that have increased their dividends in each of the last 25 years.

The S&P 500 Regional Banks Select Industry Index measures the performance of U.S. regional bank stocks included in the S&P Total Market Index, which tracks the broad U.S. equity market (large-, mid-, small-, and micro-cap stocks). 

The S&P 600 Index is a market-capitalization-weighted index that tracks the performance of the small-cap segment of the U.S. equity market.

The S&P Developed Broad Market Index (BMI) is a free float-adjusted (i.e., including only shares that are available for public trading), market capitalization-weighted index that tracks the performance of stocks from 25 developed markets.

The S&P Emerging Broad Market Index (BMI) tracks the performance of all companies domiciled in the emerging markets within the S&P Global BMI with a float-adjusted (i.e., including only shares that are available for public trading), market capitalization of at least US$100 million and a minimum annual trading liquidity of U$50 million.

 The S&P Global Broad Market Index (BMI) tracks the performance of more than 14,000 stocks from 25 developed and 24 emerging markets.

The S&P Global Infrastructure Index tracks 75 companies representing the listed infrastructure industry.

The S&P Global LargeMidCap Index tracks the performance of the stocks representing the top 85% of float-adjusted (i.e., including only shares that are available for public trading), market capitalization in each developed and emerging country. The index is a subset of the S&P Global Broad Market Index, which tracks the performance of more than 14,000 stocks from 25 developed and 24 emerging markets. 

The S&P Municipal Bond 6 Month High Grade Rate Index comprises bonds in the S&P Municipal Bond Index, a broad, market value-weighted index that tracks the performance of the U.S. municipal bond market, with a maturity equal to or greater than six months, but less than seven months, that are rated at least AA by S&P Global Ratings and Fitch Ratings, or Aa2 by Moody’s Investors Service.

The S&P Municipal Bond Intermediate Index tracks the performance of municipal bonds with a minimum maturity of three years and a maximum maturity of 15 years.

The S&P Municipal Bond Short Intermediate Index tracks the performance of municipal bonds in the S&P Municipal Bond Index, a broad, market value-weighted index that tracks the performance of the U.S. municipal bond market, with maturities ranging from one to eight years. 

The S&P/TSX 60 Index is a market capitalization-weighted index that tracks the performance of 60 of the largest and most liquid stocks listed on the Toronto Stock Exchange (TSX).

The S&P/TSX Completion Index tracks the performance of the constituents of the S&P/TSX Composite Index (mainly mid- and small-cap stocks) that are not included in the S&P/TSX 60 Index. The S&P/TSX Composite Index tracks the performance of the broad Canadian equity market. The S&P/TSX 60 Index is a market capitalization-weighted index that tracks the performance of 60 of the largest and most liquid stocks listed on the Toronto Stock Exchange (TSX).

The S&P/TSX Composite Index tracks the performance of the broad Canadian equity market—i.e., stocks listed on the Toronto Stock Exchange (TSX). 

The S&P/TSX SmallCap Index is a float-adjusted (i.e., including only shares that are available for public trading), market capitalization-weighted index that tracks the performance of the small-cap segment of the Canadian equity market—i.e., stocks listed on the Toronto Stock Exchange (TSX). 

 The S&P USA REIT Total Return Index tracks the performance of publicly traded real estate investment trusts domiciled in the U.S.

The S&P U.S. Mortgage-Backed Securities Index tracks the performance of U.S. dollar-denominated, fixed-rate and adjustable-rate/hybrid mortgage pass-through securities issued by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC).

The Shanghai Composite Index is a capitalization-weighted index that tracks the performance of all A shares and B shares listed in China. A shares are denominated in U.S. dollars and comprise companies based in mainland China that are listed on either the Shanghai or Shenzhen stock exchanges. B shares are denominated in renminbi but are traded in U.S. dollars and Hong Kong dollars. 

The Shanghai Shenzhen CSI 300 Index is a market capitalization-weighted index that tracks the performance of the largest companies on the Shanghai and Shenzhen stock markets.

The Shenzhen Composite Index is a capitalization-weighted index that tracks the performance of all A shares and B shares listed in China. A shares are denominated in U.S. dollars and include companies based in mainland China that are listed on either the Shanghai or Shenzhen stock exchanges. B shares are denominated in renminbi but are traded in U.S. dollars and Hong Kong dollars. The Shenzhen Composite Index is not adjusted for free float (i.e., including only shares that are available for public trading). 

The SIFMA Municipal Swap index tracks the performance of tax-exempt 7-day floating-rate municipal notes.

The Solactive MLP Infrastructure Index tracks the price movements of common units in master limited partnerships (MLPs) which are publicly traded on U.S. stock exchanges. 

The St. Louis Fed Financial Stress Index measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads, and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together.  

The Thomson Reuters/CoreCommodity CRB Index is a commodity futures price index that tracks the performance of a basket of 19 commodities sorted into four groups with the following weightings: energy–39%; precious metals–41%; agriculture–7%; and industrial metals–13%. 

The Tokyo Stock Price Index (TOPIX) is a free float-adjusted (i.e., including only shares that are available for public trading) market capitalization-weighted index that tracks the performance of all companies listed on the First Section of the Tokyo Stock Exchange (TSE), which organizes all large firms on the exchange into one group. The second section of the TSE pools all of the smaller remaining companies.

Trade-weighted dollar is an index created by the Federal Reserve to measure the value of the U.S. dollar (USD) based on its competitiveness versus trading partners.

The U.S. Dollar Index measures the value of the U.S. dollar against a weighted basket of currencies used by U.S. trading partners. The index rises when the dollar strengthens against these currencies and declines when the greenback weakens.

The U.S. Trade Policy Uncertainty Index measures policy-related economic uncertainty. we construct an index from three types of underlying components: news coverage about policy-related economic uncertainty, tax code expiration data, and economic forecaster disagreement.

The Wilshire Liquid Alts Equity Hedge Index measures the performance of the equity hedge strategy component of the Wilshire Liquid Alternative Index (which measures the collective performance of the five Wilshire Liquid Alternative strategies that comprise the Wilshire Liquid Alternative Universe). Equity hedge investment strategies predominantly invest in long and short equities.

Financial terms

Absolute return is the gain or loss generated by a security or portfolio over a specified period of time. 

Accruals are revenues and expenses that are recorded on a company's financial statements when the transactions occur, rather than when cash actually changes hands.

Active management seeks to outperform a specific market index or benchmark. An active manager will continuously monitor and make changes to investments in an effort to maximize returns and manage risks. 

Agency security is a type of low-risk debt instrument issued by either a U.S. government-sponsored enterprise (GSE) or a federal government agency.

Alpha is a measure of performance on a risk-adjusted basis, calculated by a comparison of the volatility of the portfolio versus its benchmark on a risk-adjusted basis. A positive alpha of 1.0 means the fund outperformed its benchmark index by 1%, while a negative alpha indicates underperformance.

Alpha source is a term used by SEI as part of our internal classification system to categorize and evaluate investment managers in an effort to build diversified fund portfolios. An alpha source is the investment approach that an active investment manager takes in an effort to generate excess returns relative to a benchmark. 

Alternative investments are financial assets outside of traditional asset classes (stocks, bonds, and cash).

Amplitude adjustment occurs when the Organization for Economic Co-operation and Development (OECD) composite leading indicator (CLI) index is adjusted to ensure that its cyclical amplitude on average agrees with that of detrended reference series. Amplitude measures the change in the price of a particular security over a period of time. The detrended reference series excludes the effects of accumulating data sets from a trend to show only the absolute changes in values. By adjusting each underlying economic series to a common level, they can be converted to indexes and combined, thereby showing the general consensus of movement of a group of economic series that are disproportionate.

Annualized return is the projected or historical return that an investment provides each year over a specific time period. 

Asset turnover measures a company's efficiency by comparing its sales relative to its average assets over a given period.

Asset-backed securities (ABS) are created from pools of income-generating assets such as credit cards, and auto, mortgage and student loans. 

AT1 bonds, also known as contingent convertible bonds, or “CoCos,” comprise bank-issued debt that can be converted into equity if a bank’s capital levels fall below required levels.

Austerity refers to measures taken by a country’s government in an effort to reduce expenditures and a budget deficit.

Baby boomers are individuals born between 1946 and 1964. The baby boomer generation comprises a substantial portion of the world's population, especially in developed nations.

Barriers of entry are factors that can prevent or impede newcomers into a market or industry sector, and so limit competition.

Basis point equals .01%. 

Bear market refers to a market environment in which prices are generally falling (or are expected to do so) and investor confidence is low. It is generally defined as a decline of 20% or greater in a stock market index.

Bearish refers to a negative view on the financial markets whereby investors are anticipating slowdowns in the economy and/or financial markets.

Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information gathered directly from each District’s sources. The reports are published eight times per year. 

Bellwether is a widely held security that tends to reflect the direction of market movements (e.g., the bellwether 10-year U.S. Treasury note). 

Beta is a quantitative measure of the volatility relative to a particular benchmark. A beta above 1 indicates volatility greater than the benchmark, while a beta below 1 indicates lower volatility than the benchmark. 

Bid-to-cover ratio is the number of bids received at a U.S. Treasury securities auction divided by the number of bids accepted; a higher ratio indicates higher demand. 

Book yield is a measure of yield that compares the accounting book value (total value of assets less liabilities) against its market value by dividing the book value per share by share price.

Bottom-up analysis comprises an investment process focusing on individual stock selection rather than the overall economic environment.

Breakeven inflation rate comprises the difference between the nominal yield on a fixed-rate bond and the real yield (an adjusted yield that takes into account the impact of inflation) on an inflation-linked bond of similar maturity and credit quality. A rising breakeven rate suggests that expectations for inflation have risen. Conversely, a falling breakeven rate suggests that expectations for inflation have declined.

Breaking the buck occurs when the net asset value of a money market fund falls below $1.00. This usually occurs when the fund’s investment income is not enough to cover operating expenses or market losses.

Bull market refers to a market environment in which prices are generally rising (or are expected to rise) and investor confidence is high. It is generally defined as a gain of 20% or greater in a stock market index. 

Bullish refers to a positive view on the markets whereby investors are anticipating economic and market growth.

Call (or redemption) price refers to the price at which a bond can be redeemed by the issuer. This is set at the time that the security was initially issued.

Call option is a financial contract that gives the buyer the right—but not the obligation—to purchase a stock at a specified price within a specific period.

CAPE (cyclically adjusted price-to-earnings) Ratio is used to assess future returns from equities, with higher-than- average CAPE values implying lower-than-average long-term returns. The ratio is calculated by dividing the price of an individual stock or stock index by the average of 10 years of earnings, adjusted for inflation. Using average earnings data over an extended time period helps to smooth out the impact of business cycles and other events.

Capital controls are measures that governments or central banks take to limit the flow of foreign capital in and out of a domestic economy.

Capital flight refers to investors selling securities in one country due to country-specific risks (financial or political instability) and investing in another country that is perceived to be safer

Capital gain is an increase in the value of an asset or investment above the original purchase price.

Capital intensity refers to business processes or industries that require large amounts of investment to produce a good or service, and thus have a high percentage of fixed assets, such as property, plant, and equipment (PP&E).

Capital stock is the amount of common and preferred shares that a company is authorized to issue, according to its corporate charter.

Capital structure refers to a combination of debt and equity that a company uses to finance its overall operations and growth. 

Carry trade involves borrowing at a low interest rate and then investing in an asset with a higher interest rate.

Cash flow is the difference between money flowing into and out of its business in a given time. It is used as a measure of a company's financial health. 

Cash management bill is a short-term security sold by the U.S. Department of the Treasury. 

Cash turnover measures a company's efficiency by comparing its sales relative to its average cash over a given period.

Cash-flow yield is a measure of yield based on a company's cash flows, calculated by dividing its cash flow per share by the share price. Used as a measure of a company's financial health, cash flow is the difference between money flowing into and out of its business in a given time period.

ChatGPT is a natural language processing tool driven by artificial intelligence (AI) technology that allows a user to have human-like conversations with a chatbot (a computer program that simulates human conversation through voice commands or text chats or both).  

CME Group’s FedWatch Tool analyzes the probability of Federal Open Market Committee (FOMC) rate moves for upcoming meetings, using the 30-Day federal-funds futures pricing data, which have long been relied upon to express the market’s views on the likelihood of changes in U.S. monetary policy. 

Collateral is an asset that a borrower pledges to a lender to guarantee a loan or bond debt. 

Collateralized bond obligations (CBOs) are investment-grade bonds created from pools of riskier, high-yield bonds. The underlying bonds are typically not investment-grade, but by pooling diverse high-yield issues, they offer enough diversification to be rated investment grade. Investment-grade bonds generally have a lower risk of default and are rated BBB or higher by S&P Global Ratings and Fitch Ratings, or Baa or higher by Moody's Investors Service.

Collateralized debt obligations(CDOs) are structured asset-backed securities (ABS) collateralized by a pool of underlying debt obligations which typically include bonds and loans. CDOs comprise multiple tranches (a slice or portion of a structured security), each with different degrees of risk and return. 

Collateralized loan obligations (CLOs) are securities that have been created by pooling together smaller high-yielding fixed income assets such as bank loans. These pools are then packaged into various tranches (a slice or portion of a structured security) according to credit quality, maturity etc.

Collateralized mortgage obligations (CMOs) are mortgage-backed securities (MBS) that are divided into tranches (a slice or portion of a structured security) for different classes of bondholders. Each tranche has a different maturity date and, therefore, a different level of risk. An agency security is backed by a government-sponsored entity, while non-agency securities are not guaranteed.

Commercial mortgage-backed securities (CMBS) are fixed-income investment products that are backed by mortgages on commercial properties rather than residential real estate.

Commercial mortgage-backed securities interest only (CMBS IO) comprise coupons that are stripped from an underlying pool of commercial mortgages and provide a stream of interest-only payments (i.e., no mortgage principal payments). 

Commercial paper is a type of short-term loan that is not backed by collateral. It is usually issued at a discount to face value, which reflects prevailing market rates, and does not pay interest. 

Commodity currencies are currencies that are closely tied to the value of commodities (e.g., gold or oil).

Commodity futures contract comprises an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future.

Composite Index of Leading Indicators (U.S. Conference Board) is designed to predict peaks and troughs in the business cycle. The index comprises 10 economic components for which changes tend to precede changes in the overall U.S. economy.

Congressional Budget Office (CBO) provides nonpartisan analysis to the U.S. Congress on federal economic and budgetary matters.

Consumer price index measures changes in the price level of a weighted-average market basket of consumer goods and services purchased by households. A consumer price index is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.

Consumer price index (CPI) swap is a contract used to transfer inflation risk from one party to another through an exchange of fixed cash flows. One party pays a fixed rate cash flow on a notional principal amount while the other party pays a floating rate linked to the CPI.

Contrarian investors and managers make investment decisions that go against conventional market trends through investing in assets that are out of favor with the market. 

Convexity measures the sensitivity of a bond’s price to a change in interest rates more precisely than duration alone. If a bond's duration increases as yields increase, the bond has negative convexity. A bond has positive convexity if its duration rises as yields decline.   

Core countries are those with the largest economies. 

Core eurozone countries comprise the largest economies in the eurozone.

Correlation is a statistical measure of the degree to which the values of two securities move in relation to each other. Certain types of risk in a portfolio can be mitigated by investing in assets that are not correlated. 

Countercyclical policy refers to any aspect of a government’s economic policy that could decrease economic or financial fluctuations. An economic policy that is believed to magnify fluctuations is called pro-cyclical.

Coupon is the amount that a bondholder will receive as interest payments. The coupon is expressed as a percentage of the bond’s par value. 

Covered bonds are debt instruments secured by a “cover” pool of mortgage loans (with property as collateral) or public-sector debt to which investors have a preferential claim in the event of default.

Credit default swap (CDS) is a derivative comprising a contract in which a buyer of credit protection (the “long position” in the swap agreement) makes a series of payments to the seller of the credit protection (the “short position”). In exchange for these payments, the seller purchases a CDS from another investor who agrees to reimburse them if the borrower defaults.

Credit quality of a fund's holdings are rated by Moody’s Investors Service. Credit ratings comprise an assessment of the creditworthiness and risk of default of a fund’s securities. Moody’s ratings are measured on a scale ranging from Aaa (highest) to C (lowest). 

Credit ratings are an assessment of the risk of default of companies or countries. The higher the credit quality (or rating), the lower the perceived risk of default. Bonds rated Baa3 or higher by Moody's Investors Service or BBB or higher by S&P Global Ratings and Fitch Ratings are classified as investment-grade. Ratings below BBB/Baa are classified as non-investment-grade, or “junk,” and are considered to be riskier. 

Credit risk refers to the risk of default on a debt investment, whereby a lender would not receive either their principal, interest, or both.

Credit spread is the difference in yield between two debt securities of the same maturity but different credit quality.

Credit spread risk is the potential for loss caused by spreads (difference in yield between comparable-duration government and non-government bonds) widening. (Duration is a measure of a security’s price-sensitivity to changes in interest rates.)

Credit watch reflects the outlook of a rating agency (S&P Global Ratings, Fitch Ratings, and Moody’s Investors Service)–generally positive, neutral or negative–for an issuer’s future credit rating.

Cyclical refers to sectors or stocks whose performance is closely tied to the economic environment and business cycle. Managers with a pro-cyclical market view tend to favor stocks that are more sensitive to movements in the broad market and therefore tend to have more volatile performance.

The debt ceiling is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments.Failing to increase the debt limit would cause the government to default on its legal obligations.

Default debt holdouts encompass bondholders who refuse to accept a restructuring. Restructuring occurs when a bond issuer alters the terms of a debt agreement in order to avoid defaulting.

Defensive sectors or stocks are less sensitive to movements in the broader market and, therefore, tend to exhibit more stable performance.

Deflation is characterized by an environment of declining prices of goods, generally accompanied by reduced economic activity. 

Deleveraging is the reduction of the debt of a company or country.

Demographics are studies of a population based on various factors— for example age, race, sex, level of education, income level and/or employment.

A derivative is a security for which the value is derived from an underlying asset. A derivative typically comprises a right or obligation to buy or sell an underlying asset (such as a stock, bond, commodity or currency) at a set price at a specific date in the future. The most common types of derivatives are futures and options. Derivatives are often used by sophisticated investors or within a pooled investment.

Derivative income refers to income generated from financial contracts called derivatives, whose value is based on an underlying asset or market variable.

Discounted cash flow is a calculation of the current value of a company based upon estimates of how much money the company should make in the future.

Distribution yield reflects payments to shareholders that may be expected to be distributed over the following 12 months as a percentage of a fund’s share price on a particular date.

Dividend yield is a financial ratio indicating how much a company pays out to its shareholders in the form of dividends. The dividend yield is calculated by dividing the amount of dividends paid per share over a designated time period by the stock's current price. 

Dividend yield ratio is a financial ratio used to estimate the value of shares based on the dividends paid. It is calculated by dividing the dividends paid per share by the market price per share.

Dove is a policy advisor–for example, at the U.S. Federal Reserve–with a positive view of inflation and its economic impact, and thus tends to favor lower interest rates.

Dovish refers to the views of a monetary policy advisor (for example, at a central bank) who has a positive outlook for inflation and its economic impact and thus tends to favor lower interest rates.

Downgrade refers to a deterioration in an analyst's rating of a specific security.

Drawdown is the decline in value from peak to trough (high point to low point) over a specific period. 

Duration is a measure of a security’s price-sensitivity to changes in interest rates. Specifically, duration measures the potential change in value of a bond that would result from a 1% change in interest rates. The shorter the duration of a bond, the less its price will potentially change as interest rates rise or fall. Conversely, the longer the duration of a bond, the more its price will potentially change. 

Earnings estimate refers to an analyst's estimation of future earnings per share (EPS) for a given period.

Earnings momentum refers to the acceleration (or deceleration) of a company's earnings.

Earnings yield is a measure of yield based on a company's earnings, calculated by dividing its earnings per share by the share price.

Efficient frontier refers to investment portfolios that provide the highest expected return for a specific level of risk. 

Elasticity of demand is measurement of the change in the demand for a product as a result of a change in its price. Elastic demand occurs if a price change creates a large change in demand. A price change that creates a small change in demand comprises inelastic demand.

Enterprise yield is a measure of yield based on enterprise value, calculated by dividing its earnings before interest and taxes by the enterprise value. Enterprise value is a measure of a business’ value that takes into account the claims of both debt and equity holders.

The European periphery debt crisis from 2008-2012, when several European countries experienced the collapse of financial institutions, high government debt, and rapidly rising bond yield spreads in government securities.

Expected tracking error is the forecasted margin by which the performance of a portfolio is expected to differ from that of the benchmark. 

Extension risk occurs when cash flows from a mortgage-related security are pushed further into the future than initially expected. This could prevent an investor from purchasing another security with a higher interest rate. 

External (or “hard”) currency typically refers to the currencies of countries which are members of the G7 (a group comprising the finance ministers of the seven largest industrialized nations)—primarily the U.S. dollar, euro, sterling and Japanese yen.

External (or hard-currency) debt is issued in the currencies of members of the G7 (a group comprising the finance ministers from the seven largest industrialized nations)—primarily the U.S. dollar, euro, sterling and Japanese yen.

External balance occurs when the money a country brings in from exports is roughly equal to the money it spends on imports.

A factor is a quantifiable security characteristic that drives returns and can be used to explain the differences in performance between securities. Examples include value, momentum, quality, and low volatility.

Federal National Mortgage Association (FNMA) is a U.S. government-sponsored enterprise (GSE) that buys conventional mortgages from private lenders and creates mortgage-backed securities (MBS).

Federal funds futures are financial futures contracts based on the federal funds rate and are traded on the Chicago Mercantile Exchange (CME) operated by CME Group Inc.

Federal funds rate is the interest rate charged to lending institutions on unsecured overnight loans. It is set by the U.S. Federal Reserve’s Federal Open Market Committee (FOMC). The rate is increased when the Federal Reserve wants to discourage borrowing and slow the economy, and decreased when the Federal Reserve wants to spur economic growth.

Fiscal relates to government revenue, especially taxes. 

Floating-rate notes are short-term debt instruments that pay interest based on a variable (or “floating”) rate.

Foreign exchange forward is a binding contract in the foreign exchange market that locks in the exchange rate for the purchase or sale of a currency on a future date. 

Foreign law bonds comprise external debt that is registered (and therefore subject to the laws of) in the country of currency denomination rather than the country of issuance. 

Frontier markets include countries that are more established than the least-developed countries but are still less established than emerging markets. 

Fundamental analysis seeks to assess a country’s or a company's financial health such as amount of debt, level of profitability, cash flow, inventory size, etc. Macroeconomic fundamentals include topics that affect an economy at large, while microeconomic fundamentals focus on the activities within smaller segments of the economy.

Fundamentals comprise data that can be used to assess a country or company's financial health such as amount of debt, level of profitability, cash-flow, inventory size, etc.

The Funding for Lending Scheme (FLS) was launched by the U.K. government and the Bank of England in July 2012 with the goal of boosting lending to households and businesses. The FLS allows banks to borrow from the Bank of England for up to four years.

Futures are derivative contracts obligating the buyer to purchase an asset (or requiring the seller to sell an asset) at a predetermined future date and price.

FX (foreign exchange rate) refers to the conversion of one currency into another at a specific rate. The conversion rates for nearly all currencies are constantly floating as they are driven by the market forces of supply and demand.

G7 is an intergovernmental organization made up of the world's largest developed economies: France, Germany, Italy, Japan, the U.S., the U.K., and Canada. The Global Financial Crisis (GFC) refers to the period of extreme stress in global financial markets and banking systems between mid-2007 and early 2009.

The Government National Mortgage Association (GNMA) is a U.S. government-sponsored enterprise (GSE) that guarantees mortgage-backed securities (MBS) backed by government-insured loans like FHA, VA, and USDA loans.

Government-related debt refers to bonds issued by government-sponsored agencies or local authorities.

Gross domestic product (GDP) is the total monetary or market value of all the goods and services produced in a country during a certain period.

Growth stocks exhibit steady earnings growth which exceeds that of the broader market.

Hard landing occurs when a country's economy rapidly shifts from growth to slow growth to flat as it approaches a recession, usually resulting from a government's attempts to slow inflation.

Hard-currency debt is issued in the currency of countries which are members of the G7 (a group comprising the finance ministers from the seven largest industrialized nations)—primarily the U.S. dollar, euro, sterling and Japanese yen.

Hawk is a policy advisor—for example, at the U.S. Federal Reserve—with a negative view of inflation and its economic impact, and thus tends to favor higher interest rates.

Hawkish refers to a policy advisor—for example, a central bank—with a negative view of inflation and its economic impact, and thus tends to favor higher interest rates.

Hedging is an investment strategy designed to try to limit potential losses from swings in market value (price changes) of stocks, bonds, commodities or currencies. This may be achieved by purchasing equally weighted and contrasting exposure in two different markets.

Higher-quality debt carries a lower risk of default relative to lower-quality credit.

High-yield bond (also known as a “junk” bond) is rated below investment-grade (BB or lower by S&P Global Ratings and Fitch Ratings, Ba or lower by Moody’s Investors Service), indicating a higher level of risk to an investor compared to a higher-rated bond. Investors typically are compensated for assuming a greater level of risk by receiving a higher yield relative to investment-grade bonds. 

Idiosyncratic risk comprises investment risk that is endemic to an individual asset, a group of assets or, in some cases, a specific asset class.

Indirect bid is a bid at a U.S. Treasury auction that is placed through an intermediary, such as a primary dealer or broker. The indirect bidder typically is a foreign entity; consequently, these bids are generally viewed as a reflection of demand from foreign governments, central banks, investment funds, and individual investors. 

Inflation swap is a financial instrument used to transfer inflation risk from one party to another. One party typically pays a fixed rate and another pays a variable rate that adjusts to changes in the level of inflation as denoted by a benchmark. 

Interest-rate hedging is a portfolio management technique designed to protect against fluctuations in interest rates.

Interest-rate risk is the risk that a change in interest rates could affect an asset’s value.

Interest-rate swap is an agreement between two parties to exchange interest-rate payments, which usually involves the swap of a fixed rate for a floating rate, or a floating rate for another floating rate.

Interval fund is a fund that offers investors the opportunity to buy and sell shares at predetermined intervals, typically quarterly, semi-annually, or annually. 

Intrinsic value is a measure of what an asset is worth. Comparing the intrinsic value to the company’s current share price can provide investors an indication of whether the asset is undervalued or overvalued.

Inverted yield curve occurs when short-term yields exceed long-term yields. While an inverted yield curve historically has predicted economic recessions, it is an indicator—not a forecast.

Investment-grade bonds generally have a lower risk of default and are rated Baa or higher by Moody's Investors Service or BBB or higher by S&P Global Ratings and Fitch Ratings. These bonds tend to be issued at lower yields than those of less creditworthy bonds. The ratings for S&P Global Ratings and Fitch Ratings range from AAA (highest) to D (lowest). Moody’s Investors Service assigns credit ratings from Aaa to C. 

Leverage is the degree to which an investor or company is using borrowed money to finance activities. For example, a highly leveraged company would have a significant amount of debt relative to its equity. Leverage can help increase returns but can also increase risk in that it may be more difficult to make payments on debt.

Leveraged buyout is the purchase of a company using a significant amount of borrowed assets (bonds or loans) to finance the acquisition.

Liability-driven investment (LDI) strategies focus on acquiring sufficient assets to cover all current and future liabilities such as employee pensions. 

Libor (London Interbank Offered Rate) is the average interest rate at which a group of banks lend to each other for funds denominated in a given currency. Libor is calculated in five different currencies across five different maturities (overnight and one, three, six and 12 months).

Linker is an inflation-linked bond issued by the U.K. government.

Liquid hedge fund is an investment fund that offers hedge fund-like strategies but with greater liquidity and accessibility. These funds are structured like traditional mutual funds or ETFs, allowing investors to buy and sell shares daily.

Liquid refers to an asset that can easily be converted into cash in a relatively short amount of time. 

Liquidity is the conversion of an asset into cash, with considerations to the impact of that transaction on a security’s price.

Liquidity risk is the risk that an asset will be unable to be converted into cash, especially in a short timeframe, without an impact on its price.

Local law bonds comprise external debt that is registered in (and therefore subject to the laws of) the country of issuance rather than the country of currency denomination. 

Local-currency debt comprises assets denominated in local currencies.

Long position refers to the purchase of an asset with the expectation it will increase in value. 

Long-duration bond is a bond that is more price-sensitive to changes in interest rates.

Long-duration stock is a stock that is expected to produce the highest cash flows in the future. These companies are often growth-oriented and similar to long-duration bonds, and are more sensitive to interest-rate hikes and inflation than their shorter-duration counterparts.

Long-term refinancing operations (LTROs) are European Central Bank (ECB) loans that were introduced with the intention of helping to ease short-term money supply pressures on the eurozone's banks.

Low volatility comprises an investment strategy that seeks to deliver returns comparable to those of the market while taking less risk.

Macroeconomic/macro refers to the broad economy of a country or region, or the global economy.

Margins measure a company's profitability by comparing profits (gross, operating, or net) against revenue.

Market capitalization refers to the total value of a publicly traded company’s outstanding shares. 

Market-capitalization (market-cap) weighted index assigns the weighting of its underlying stocks proportionally by size as measured by this total value. Many indices are market-cap weighted so that smaller companies (companies with smaller capitalizations) do not have a disproportionate impact on the performance of the index.

Median forward price-to-earnings (P/E) ratio is calculated by dividing a company’s forecasted value (using the middle set of values in a distribution range) and earnings by its after-tax earnings for the prior 12-month period. It is used to determine a company’s relative value (the value of an asset compared to that of similar assets) based on the company’s level of earnings.

Microeconomic comprises the study of households and firms' behavior in decision-making and allocation of resources. 

Modified gross performance reflects certain non-rebatable operational expenses charged by the funds, such as printing, legal, audit and accounting expenses. The performance numbers do not include either (i) the management fees, administrative fees and shareholder servicing fees charged by the funds, or (ii) the account-level advisory fees charged to Institutions clients pursuant to the terms of the investment management agreement between SIMC and each Institutions client, each of which will reduce a client’s returns. 

Momentum is a trend-following investment strategy that is based on acquiring assets with recent improvement in their price, earnings, or other relevant fundamentals. 

Monetary policy is implemented by many central banks to manage economic fluctuations and achieve price stability, which means that inflation is low and stable. Central banks in many advanced economies set explicit inflation targets.

Mortgage-backed securities(MBS) are pools of mortgage loans packaged together and sold to the public. They are usually structured in tranches (a slice or portion of a structured security) that vary by risk and expected return. 

National Association of Realtors (NAR) is a trade association that is involved in all aspects of the residential and commercial real estate industries.

National savings rate refers to the percentage of a country’s gross domestic product (GDP) that is saved rather than spent.

New York Mercantile Exchange (NYMEX) is the world's largest physical commodity futures exchange and is part of the Chicago Mercantile Exchange Group (CME Group), which is the world’s leading derivatives marketplace. 

Nominal gross domestic product (GDP) is the total monetary or market value of all the goods and services produced in a country during a certain period, and is not adjusted for inflation.

Nominal yield is the interest rate stated on a bond when it is first issued.

Non-accelerating inflation rate of unemployment (NAIRU) represents the lowest unemployment rate that can be sustained without causing wages growth and inflation to rise. 

Non-agency mortgage-backed securities (MBS) comprise multiple mortgages packaged together into single securities and are not guaranteed by a U.S. government body or agency.

Non-agency security is not guaranteed by the U.S. government or a government agency.

Nonfarm payrolls represent the number of people employed in the U.S, excluding farm, general government, private household and non-profit organization employees. 

Off-benchmark exposure indicates that a fund, product or manager is investing in stocks or securities that are not included in a portfolio’s benchmark.

OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 of the world’s major oil-exporting nations seeking to manage the supply of oil in an effort to set the price of oil on the world market. 

Option-adjusted spread (OAS) estimates the difference in yield between a security or collection of securities and a risk-free rate (typically comparable-duration Treasurys) after removing the effects of any special features, such as provisions that allow an issuer to call a security before maturity. 

Options are contracts that provide a buyer with the right, but not the obligation, to buy (a call option) or sell (a put option) a security at an agreed-upon price.

Options strategy combines multiple options contracts and sometimes the underlying asset to achieve a specific investment objective.

Outright Monetary Transactions (OMT) program enables the European Central Bank to purchase unlimited quantities of the sovereign debt of troubled eurozone nations in an effort to limit its borrowing costs. These purchases are conditional upon economic reforms and limited to government securities with maturities of between one and three years. 

Overcollateralized assets are used as collateral on a loan and exceed the value of the loan. 

Overnight rate is the interest rate that large financial institutions use to borrow/lend in the overnight market. In the U.S., the overnight rate (the federal funds rate) is established by the U.S. Federal Reserve. 

A pass-through security is typically backed by a pool of mortgage loans and provides the investor with the cash flow from the mortgage/debt payments. This income is passed through from the debtor to the investor by the financial institution or government agency issuing the security.

Peripheral eurozone countries are those countries in the eurozone with the smallest economies. 

Personal consumption expenditures (PCE) price Index measures the prices that consumers pay for goods and services–excluding volatile food and energy prices–to reveal underlying inflation trends. 

Policy rates are the interest rates set by central banks. 

Prepayment risk is the risk that a mortgage loan will be repaid early such that anticipated interest would not be received.

Prepayment speed is the rate at which underlying borrowers service their debts ahead of schedule, such as mortgage prepayments due to refinancing. Prepayment speed impacts the timing, and thus the present value, of the expected cash flows associated with a security. 

Price momentum refers to the acceleration (or deceleration) of a security's price.

Price volatility refers to the size and frequency of changes in an asset's price.

Price/earnings (P/E) ratio is calculated by dividing the current market price of a stock by the earnings per share. Price/earnings multiples often are used to compare companies in the same industry, or to assess the historical performance of an individual company. 

Price-to-book (P/B) ratio is calculated by dividing a company’s market capitalization by its book value. Book value is the value of an asset as it appears on a company’s balance sheet, equal to cost minus accumulated depreciation. The value is the same whether the calculation is made for the whole company or on a per-share basis. 

Private credit comprises privately negotiated loans and debt financing provided by non-bank lenders to businesses, typically outside of public markets.

Private equity comprises investments made in privately held companies or publicly traded companies that are taken private. Private equity firms raise capital from investors to acquire and manage these companies, with the ultimate goal of selling them for a profit. 

Pro-cyclical policy refers to any aspect of a government’s economic policy that could magnify economic or financial fluctuations. An economic policy that is believed to decrease fluctuations is called counter-cyclical.

Producer-price index (PPI) tracks the average change over time in selling prices received by domestic producers of goods and services. 

Purchasing managers’ index (PMI) is an indicator of the prevailing direction of economic trends in the manufacturing and service sectors.

Put option is a contract which gives the buyer the right—but not the obligation—to sell a stock at a specified price within a specific period.

Qualitative analysis is based on analyst research and subjective views. 

Quality strategy comprises a long-term buy-and-hold strategy that is based on acquiring shares of companies with strong and stable profitability with high barriers of entry (factors that can prevent or impede newcomers into a market or industry sector, thereby limiting competition). 

Quantitative analysis is based on computer-driven models, using data such as revenue and interest rates.

Quantitative easing refers to expansionary efforts by central banks to increase the supply of money in the economy. These actions include the purchase of long-term government bonds and mortgage-backed securities (pools of mortgage loans packaged together and sold to the public). 

Quantitative tightening refers to efforts by central banks to decrease the supply of money in the economy.

Quasi-sovereign debt is issued by organizations that are majority-, but not wholly, government-owned.

Range-bound refers to securities or stocks that are trading between consistent high and low prices for a period of time. The top of a security’s trading range often provides price resistance, while the bottom of the trading range typically offers price support. 

Real gross domestic product (real GDP) is the inflation-adjusted total monetary or market value of all the goods and services produced in a country during a certain period.

Real interest rate is a nominal interest rate (the interest rate stated on a bond when it is first issued) adjusted for inflation. 

Real yield is an adjusted yield that takes into account the impact of inflation. The real yield is calculated by taking the nominal bond yield (the interest rate stated on a bond when it is first issued) and then deducting the current rate of inflation.

Recapitalized/recapitalization encompasses injecting fresh equity into a company or a bank, which can be used to absorb future losses. This generally takes place through the company issuing new shares. 

Recession comprises a downturn in economic activity, commonly defined as two or more consecutive quarters of negative gross domestic product (GDP) growth.

Relative value trade refers to the sale of a security that is currently expensive and the purchase of another that is relatively cheap.

Repurchase agreement (repo) rate is the rate at which a central bank repurchases government securities from a commercial bank.

Restructuring refers to altering the terms of a debt agreement in an effort to avoid defaulting.

Return on capital (ROC) measures a company's profitability by comparing its net operating income after tax against its average invested capital over a given period.

Revenue is the total income generated from selling goods or services before any expenses are deducted. It is often called the "top line" on an income statement and represents the money a company earns from its primary operations, such as sales of goods or services, along with other sources like interest and dividends.

Reverse-mortgage securities represent claims on certain cash flows arising from underlying pools of reverse mortgage agreements, which involve property owners selling equity over an extended period of time in exchange for a series of periodic payments. 

Risk assets, such as equities, commodities, high-yield bonds, real estate, and currencies, carry a degree of risk and generally are subject to significant price volatility. 

Risk premium represents the additional potential return for relatively riskier assets to compensate investors for the additional risk that they are assuming. 

Roll-down return is a bond trading strategy for selling a bond before its maturity date in an effort to profit from rising prices. Bond prices rise when yields fall, which is what tends to happen as bonds approach maturity.

Sales revisions refer to changes in a company's reported sales for a given period.

Sales yield is a measure of yield based on a company's sales, calculated by dividing its sales per share by the share price.

SEC 30-day yield is a standardized calculation used to estimate the potential income an investor might receive from a bond fund over a year. It reflects the income generated by the fund (interest and dividends) over the past 30 days, after accounting for expenses, and annualizes it. 

Sector rotation involves shifting from one market sector to another in an attempt to profit from changes in top-performing segments of the market. 

Securities comprise a wide variety of investments, including stocks and bonds.

Securitized bonds provide interest and principal payments that are backed by the cash flows from another pool of assets.

Security selection is an investment strategy that employs research and judgement to uncover individual opportunities that have been mispriced by other financial market participants. 

Senior bondholders are the first creditors to be paid in the event that a government or company has difficulty paying its debt. This is also known as being at the top of the capital structure (a combination of debt and equity that a company uses to finance its overall operations and growth). 

Senior Loan Officer Opinion Survey on Bank Lending Practices is conducted by the U.S. Federal Reserve to obtain information from up to 80 large domestic banks and 24 U.S. branches and agencies of foreign banks. 

Shareholder yield is a measure of yield based on the various ways that a company can deliver value to its shareholders, namely, dividends, share buybacks, and debt reduction.

Sharpe ratio measures the risk-adjusted performance of an asset or portfolio compared to a risk-free asset (such as a U.S. Treasury bill). 

Short position is established when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price. A trader may decide to short a security when they believe that the price of that security is likely to decrease in the near future. 

Short-covering is the purchase of securities to close a short position. For these short positions, the investor had borrowed securities in order to sell them at a high price with the intention of buying the same securities later at a lower price than when sold in an effort to gain from the decline in the value of the security.

Short-duration bonds are less price-sensitive to changes in interest rates. Duration is a measure of a security’s price-sensitivity to changes in interest rates.

Simple mean is the average value of a set of numbers.

Soft landing occurs when a country’s growth and inflation slow, but the economy does not enter recession.

Solvency refers to a company's ability to meet its long-term financial obligations while remaining a going concern.

Spot trade is the purchase or sale of a foreign currency or commodity for immediate or “on the spot” delivery.

Spread is the additional yield, usually expressed in basis points (one basis point equals 0.01%), that an index or security offers relative to a comparable-duration index or security (the latter is often a risk-free credit, such as sovereign government debt). Spread sectors generally includes non-government sectors where investors demand higher yields above those of government bonds for assumed increased risk.

Spread compression occurs when the yield on a previously higher-yielding bond declines due to strong demand.

Spread duration is a measure of the sensitivity of the price of a security to changes in its credit spread. The credit spread is the difference between the yield of a security and the yield of a benchmark rate, such as a cash interest rate or government bond yield. 

Stagflation refers to an economic environment of stagnant activity, accelerating inflation, and rising unemployment.

Standard deviation is a statistical measure of the historical volatility of an investment. It measures the average periodic divergence from the investment’s average return. A volatile stock has a high standard deviation, while the standard deviation of a stable blue-chip stock generally is lower. 

Strategic allocation refers to longer-term asset allocation decisions or positions that seek to take advantage of future market opportunities.

Stress testing is a computer-generated simulation technique that tests hypothetical scenarios in an effort to determine the ability of a company or portfolio to maintain a certain level of effectiveness under unfavorable financial conditions. 

Structured securities are hybrid securities created from pooling financial assets and instruments, and repackaging them in ways that result in different characteristics (for example, expected risk and return, cash-flow schedule, credit quality, liquidity, etc.) from the individual securities comprising the pool. 

Supranational debt encompasses bonds issued by organizations comprising multiple nations, including the European Union (which comprises 27 European nations).

Supranational organization is a multinational union or association (such as the International Monetary Fund) in which member countries cede authority and sovereignty on at least some internal matters to the group. The supranational organization’s decisions are binding on its members.

Surprise hit rate refers to the frequency with which a given company's financial performance metric, typically earnings, exceeds (or falls short of) analyst expectations.

Tactical investment strategy employs short-term asset allocation changes or positions which seek to take advantage of near-term market opportunities.

Tail is the difference between the average bond auction yield and the yield implied by market trading prior to the auction. 

Tail risk is the probability of extreme events, such as unusually large market movements or investment losses. 

Tariff is a tax imposed by a government on the import or export of goods between countries. Governments impose tariffs to raise revenue, protect domestic industries, or exert political leverage over another country.

Tax Cuts and Jobs Act of 2017 overhauled the federal tax code by reforming individual and business taxes. 

Technical analysis employs statistical data in determining the future price of an asset or the direction of market movements. 

TED spread represents the difference between the three-month T-bill interest rate and three-month London Interbank Offered Rate (Libor). It is an indicator of credit risk that exists in the broad market. 

Term premium is the additional yield that investors demand to hold longer-duration securities.

Tier refers to the capital adequacy of a bank. Tier one is “core” capital and includes equity and disclosed reserves. Tier two is “secondary” capital, and includes undisclosed reserves and subordinated debt which will only be repaid after all other senior, debts have been paid if the issuer defaults.

Tier systems are used by analysts to classify Chinese cities. Businesses use the tier categorization to track city development, market trends, and tax policies and incentives, among other things. 

Top-down analysis is an investment process focused on the overall economic environment rather than individual stock selection.

Tracking error reflects how closely the returns of a fund or portfolio follows its benchmark (usually an index). If tracking error is measured historically, it is referred to as “ex-post tracking error.” If a model is used to predict future tracking error, it is called “ex-ante tracking error.”

Trade deficit occurs when the value of a country's imports exceeds the value of its exports. 

Trade surplus occurs when the value of a country's exports exceeds the value of its imports. 

Tranche is a slice or portion of a structured security. Each tranche carries a different maturity, yield, and degree of risk.

Treasury Inflation-Protected Securities (TIPS) are U.S. Treasury bonds that are indexed to an inflationary gauge to protect investors from a decline in the purchasing power of their money.

U.S. Treasury bills are short-term debt obligations backed by the U.S. Treasury Department with a maturity of one year or less.

U.S. Treasury bonds are debt obligations backed by the U.S. Treasury Department with a maturity between 10 and 30 years.

U.S. Treasury notes are debt obligations backed by the U.S. Treasury Department with a maturity between one and 10 years.

Unsubsidized 30-day SEC yield represents the annualized yield of a fund over a 30-day period, excluding any fee waivers or expense reimbursements that might be in place.

Upgrade refers to an improvement in an analyst's rating of a specific security.

Value is a mean-reverting investment strategy that is based on acquiring assets at a discount to their fair valuations. Mean reversion is a theory that prices and returns eventually move back towards their historical average.

Value stocks are considered to be cheap and trade at lower prices relative to their fundamentals, such as dividends, earnings and sales.  

A variable rate demand note (VRDN) is a long-term loan (usually from a commercial bank) that is payable on demand and bears interest tied to a money market rate, usually the bank prime rate. The rate on the note is adjusted upward or downward each time the base rate changes. A VDRN enables a municipal government to borrow money for long periods of time while paying short-term interest rates to investors. 

Weighted average market capitalization index (Market-cap weighted index) refers to an index in which the average price is weighted for market capitalization (the total value of a publicly traded company’s outstanding shares). Most indexes use weighted averages so that companies with relatively smaller capitalizations do not have a disproportionate impact on the performance of the index.

Weighted mean is an average calculated by assigning different weights to some of the individual values. If all the weights are equal, then the weighted mean is the same as the arithmetic mean.

Weighted-average duration is a financial metric that calculates the average time until a bond's cash flows are received, with each cash flow weighted by its present value. It's used to assess a bond's price sensitivity to interest rate changes and to compare bonds with different characteristics. 

The when-issued level refers to the price of a bond when it is issued by the U.S. Treasury. 

Yield is a general term for the expected return, in percentage or basis points (one basis point equals 0.01%), of a fixed-income investment. 

Yield curve represents differences in yields across a range of maturities of bonds of the same issuer or credit rating. A steeper yield curve represents a greater difference between the yields. A flatter curve indicates that the yields are closer together.

Yield curve control comprises the targeting of a longer-term interest rate by a central bank, which then buys or sells as many bonds as necessary to hit that rate target.

Yield-curve flattener position reflects the expectation that the difference between yields for bonds with short maturity dates and yields for bonds with long maturity dates will decline.

Yield curve steepener position comprises a strategy that employs derivatives (for which the value is derived from underlying assets) in an effort to benefit from escalating yield differences that occur as a result of increases in the yield spread between two Treasury bonds of different maturities. A steepener is implemented by taking an overweight position in the shorter end (five- to seven-year maturities) of the yield curve and an underweight allocation to the longer end (10-to-15 years). 

Yield spreads represent the differences in yields offered among bonds of varying maturities, credit ratings or issuers. Tightening spreads indicate that the difference has decreased. If spreads widen, the difference has increased. 

Yield to call is the expected return of a bond if it is held to the next callable date. 

Yield to maturity(YTM) is the expected return of an index, portfolio or security if held to maturity, with intermittent cash flows reinvested at the YTM rate. 

Yield to worst is a measure of the lowest possible yield that can be received on a bond with an early redemption provision.