Expectations for return are calculated by measuring potential risks over time, and then subtracting the cost of the investment.
BETTING AGAINST THE BENCHMARK
BETTING AGAINST THE BENCHMARK
A standard against which the performance of a security, mutual fund, or investment manager can be measured; betting against it would be high risk expecting high return
FIXED RETURN
FIXED RETURN
A return in the form of fixed periodic payments and the eventual return of full principal at maturity
LEVERAGE
LEVERAGE
An investment strategy of using financial instruments (such as options) or borrowed money to generate outsized investment returns
LONG AND SHORT
LONG AND SHORT
Refers to a policy of only holding “long” positions in assets and securities in order to benefit from an increase in prices; the opposite is to be “short”, which means the holder of the short position gains profits when the prices decrease
RETURN NET OF FEES
RETURN NET OF FEES
Refers to calculation of return or profit received after fees, taxes, and expenses have been paid
NOMINAL RATE OF RETURN
NOMINAL RATE OF RETURN
The amount of money generated by an investment before expenses such as taxes, investment fees and inflation are factored in
RETURN NET OF INFLATION
RETURN NET OF INFLATION
The return on an investment after removing the effects of increased pricing and devalued purchasing power of currency caused by inflation. Also known as a real rate of return
EFFICIENT FRONTIER
EFFICIENT FRONTIER
A term that describes portfolios that should capture the highest expected return for a defined level of risk or the lowest risk for a given level of expected return
VARIABLE RETURN
VARIABLE RETURN
This type of return changes or fluctuates over time, because it is based on an underlying interest rate or market values that change periodically
ALPHA
ALPHA
The expected risk-adjusted return named in the benchmark and seen as a reflection on an asset manager’s success
BETA
BETA
The volatility in returns of an asset compared to variability in performance over a previous period of time
OTHER SECTION CATEGORIES



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