Absolute return

A return which is positive in all market conditions as a result of pursuing certain investment strategies.

Alternative Investments

Alternative investments typically have flexible investment strategies, allow for the use of derivatives, leverage and short selling, and are expected to generate returns that have low correlation with traditional asset classes.

Bond (also known as a fixed income security)

An obligation to repay a debt. Bonds represent a loan from the purchaser to the issuer. In return, the issuer typically promises to make regular interest payments with full repayment of the principal on a specific date in the future.

Core

An investment style that produces a portfolio which aims to reflect the broad characteristics of a market index, including for an equity market, market capitalisation and industry sector weights, and relative mix of value and growth companies. Investment decisions are based on an assessment of a company's prospects relative to its peers rather than on an assessment of the relative attractiveness of the various style characteristics of the market.

Corporate Bond

A bond issued by a corporation or corporate-like entity.

Correlation

A measure of how variables tend to move in relation to one another. Variables that generally rise or fall in parallel are positively correlated and those that move in opposite directions are negatively correlated.

Currency Risk

The risk of incurring losses in relation to the value of overseas investments as a result of currency movements.

Derivatives

Derivatives are financial products whose return is linked or derived from changes in the value of an underlying security. Derivatives are generally more timely and cost effective to buy and sell than underlying assets.

Dividend

A payment declared by a company and paid to shareholders.

Emerging growth

The strategy of investing in equity securities of small and medium-sized companies that are considered to have the potential for above-average growth.

Equity / Share

Ownership in a corporation and the appropriate claim on that corporation's earnings and assets.

Event driven

Event driven strategies seek to capitalise on extraordinary situations that will impact on the price of shares in a company. Such events may include mergers, restructures or a change of ownership.

Fund of fund

An investment structure in which a fund invests in a series of other funds.

Hedge

Taking to steps to protect against, or reduce, a risk. The term is common in foreign currency markets.

Investment Style

A description of a fund manager's investment strategy, reflecting any key tilt against a market index, including for an equity market, market capitalisation, industry or sector weights, and relative mix of value and growth companies.

Leverage

Borrowing to invest more.

Long/short

Long/short is an investment strategy, generally associated with hedge funds, which involves buying certain securities long and selling others short.

Macro

A strategy that speculates on shifts in global economies, typically trading fixed income, commodities, currencies and equities index futures markets on a macroeconomic level. A Macro strategy may use leverage to increase the magnitude of returns.

Property Security

Listed property trust or property related listed equity.

Secondary Market

A market in which an investor purchases a security from another investor rather than acquiring it from the issuer of the security by way of the original issue.

Short selling

Involves a manager selling assets that they do not own on the expectation that the asset will fall in value and can subsequently be bought at a price lower than the sale price.

Value

An investment style that seeks to exploit market inefficiencies whereby some companies trade at levels away from what is assessed to be their fair value. A value investor anticipates the market will overcome these inefficiencies and that each company's share price will revert towards their assessed fair value.

Volatility

The extent of fluctuation. The greater the fluctuation, the less certain an investor is of return, and hence volatility is one measure of risk.

Yield

The total income earned from an investment, normally expressed as a percentage.

Yield Curve

A graphic representation of the relationship among yields of bonds of the same quality but with different maturities.