Investment Dictionary
AActive fund Clone
A fund that aims to provide above-average performance by using human judgement and/or quantitative tools to select and trade stocks and asset classes. Active fund managers try to outperform indices or meet specific total return targets. Index fund managers, by contrast, try to match the performance of indices as closely as possible.
Alpha
An investment manager's return relative to the return of a benchmark.
Altcoin
Any cryptocurrency that is not Bitcoin, such as Ethereum (ETH), Binance Coin (BNB), or Solana (SOL).
AML (Anti-Money Laundering)
Regulations and processes designed to prevent illegal financial activities, especially in the crypto space.
Annual report
The yearly audited record of a corporation or a mutual fund's condition and performance that is distributed to shareholders.
Annual turnover
The percentage by value of stocks in a portfolio that are sold and replaced with new stocks each year. Index funds tend to have much lower turnover than active funds and are therefore likely to have fewer trading costs to pass on to investors and detract from performance.
Annualized
A procedure where figures covering a period of less than one year are extended to cover a 12-month period.
Annualized rate of return
The average annual return over a period of years, considering the effect of compounding. Annualized rate of return also can be called compound growth rate.
Ape
To buy a coin or to swap another cryptocurrency for a different one
Appreciation
The increase in value of a financial asset.
Arbitrage
Profiting from differences in the prices quoted for a stock. Arbitrageurs simultaneously purchase and sell the same stock, usually on different exchanges or marketplaces. In the case of iShares funds, market participants use arbitrage to make a profit by buying and selling iShares funds and their underlying stocks in the primary and secondary markets for iShares funds. This benefits all investors in the iShares secondary market - whether institutions or individuals - by helping to keep the market price of iShares funds close to the value of their underlying stocks.
BBalanced fund
Mutual funds that seek both growth and income in a portfolio with a mix of common stock, preferred stock or bonds. The companies selected typically are in different industries and different geographic regions.
Basis Point (BIP)
A unit of measure, equal to 1/100th of 1%, or 0.01%
Bear market
A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. A market in which prices decline sharply against a background of widespread pessimism, growing unemployment or business recession. The opposite of a bull market.
Benchmark
A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund.
Beta
A measure of volatility showing how volatile stocks or funds are relative to their benchmark indices. A benchmark index has a fixed beta of 1. A stock or fund with a beta of more than 1 moves up and down more than the market, while the value of a stock or fund with a beta of less than 1 will fluctuate less than the market.
Bid price
The highest price that buyers are willing to pay for a security. Related terms: offer price, spread.
Bitcoin (BTC)
The first and most popular cryptocurrency, created by an anonymous entity called Satoshi Nakamoto.
Blockchain
A decentralized ledger that records all cryptocurrency transactions across a network of computers.
Buyout
An investment in which ownership equity is acquired in an existing company or division of a company. The seller could be the parent company, public shareholders or a private equity investor. Most buyouts involve significant leverage and are known as leveraged buyouts (LBOs). If the present management of the business participates in the buyout, the transaction is known as a management buyout (MBO).
CCapital Gain
The difference between a security's purchase price and its selling price, when the difference is positive.
Capital loss
The amount by which the proceeds from a sale of a security are less than its purchase price.
Capitalization
The market value of a company, calculated by multiplying the number of shares outstanding by the price per share.
Cash Equivalent
A short-term money-market instrument, such as a Treasury bill or repurchase agreement, of such high liquidity and safety that it is easily converted into cash.
Clean Price
The price quoted for a bond excluding accrued interest.
Coin
A standalone cryptocurrency with its own blockchain (e.g., Bitcoin, Ethereum).
Cold Wallet
A cryptocurrency wallet that is not connected to the internet, offering a higher level of security.
Collective Investment Scheme
A fund that gives investors access to a diversified portfolio of investments. Some collective investment schemes specialize, for example by investing purely in equities issued by large companies in a particular country or market. Other collective investment schemes may provide access to a range of assets or markets. Each shareholder in a collective investment scheme participates in the gains or losses made by the fund. Many collective investment schemes are open-ended funds and are therefore able to create and redeem shares as demand for shares increases or declines. iShares funds are examples of open-ended collective investment schemes that aim to reflect the returns of market indices.
Commission
The fee paid to a broker on each purchase or sale of a security. iShares products are dealt through brokers and commission is therefore payable on the purchase or sale of iShares products. Private investors who trade frequently or invest regularly should take this into account when deciding whether iShares products are an appropriate vehicle for their investment needs.
Contract for Difference (CFD)
A financial instrument whereby an investor enters into a contract with a financial institution to receive or pay the difference between the value of an index on the day the contract is settled and the day it matures. In using CFDs investors risk losing more money than they originally invested.
Cope
Mental strategies or justifications that people use to deal with negative outcomes, such as losses or missing out on profitable trades.
Core Building Block
Part of the core holdings in a core-satellite portfolio. Core building blocks usually provide long-term exposure to an entire market or geographic region. They are therefore usually highly diversified and exhibit relatively low risk. For many investors, index funds provide the most efficient and inexpensive tools for combining core building blocks into a core portfolio. For example, an investor might use a variety of iShares products as building blocks to establish long-term, lower-risk core investments around which active investment strategies may be employed to boost performance.
Custodian
A bank that holds a mutual fund's assets, settles all portfolio trades and collects most of the valuation data required to calculate a fund's net asset value (NAV).
Cut-off time
The time of day when a transaction can no longer be accepted for that trading day.
DDebt Management Office (DMO)
The DMO was established on 4th October 2000 to centrally coordinate the management of Nigeria’s debt. A major objective of the DMO is good debt management practices that make positive impact on economic growth and national development, particularly in reducing debt stock and cost of public debt servicing in a manner that saves resources for investment in poverty reduction programs.
Decentralized Finance (DeFi)
Financial services built on blockchain technology that operate without traditional intermediaries like banks.
Derivatives
Contracts entered for the purpose of exchanging value on underlying securities or physical assets. Generally, derivatives are used for operational efficiency or to control transaction costs.
Disclaimer
A formal statement saying that you are not legally responsible for something, such as the information given in a book or on the internet, or that you have no direct involvement in it.
An ETF that trades in the secondary market at a price less than its net asset value (NAV) is said to trade at a discount to its NAV. An ETF that trades in the secondary market at a price that is higher than its NAV is said to trade at a premium to its NAV. iShares ETFs may trade above or below their NAVs. However, iShares ETFs' open-ended structure and the mechanism used to create and redeem iShares ETFs are designed to continually move the market price of iShares funds towards their NAVs. iShares funds are therefore highly unlikely to experience the prolonged periods of discount or premium to NAV experienced by many closed-ended funds.
Diversification
Spreading risk by investing in a variety of asset classes, sectors or geographical regions. The aim of diversification is to increase the likelihood that losses from one investment will be offset by gains from another investment and thus reduce the risk that all the investments in a portfolio will decline in value at the same time.
Dividend
A dividend is a portion of a company's profit paid to common and preferred shareholders. Dividends provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends.
Dollar-Cost Averaging (DCA)
An investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset’s price.
E
An indication of a company's profitability. The portion of a company's profit allocated to each outstanding share. Calculated as:
- Net Income - Dividends on Preferred Stock.
- Average outstanding shares
Effective duration
A measure of a bond's sensitivity to interest rate changes. Like modified duration, effective duration approximates the change in a bond's price given a change in yield. Effective duration deals with embedded options within bonds, whereas modified duration is used only when all bonds under consideration are option free.
Equities
Shares issued by a company which represent ownership in it. Ownership of property, usually in the form of common stocks, as distinguished from fixed-income securities such as bonds or mortgages. Stock funds may vary depending on the fund's investment objective.
Equity fund
A mutual fund/collective fund in which the money is invested primarily in common and/or preferred stock. Stock funds may vary, depending on the fund's investment objective.
Ethereum (ETH)
The second-largest cryptocurrency by market capitalization, known for its smart contract functionality.
Eurobonds
The eurobond is a type of bond that is issued in a currency that is different from that of the country or market in which it is issued. Despite its name, it has no particular connection to Europe or the euro currency. Due to this external currency characteristic, these types of bonds are also known as external bonds.
Ex-Dividend
The interval between the announcement and the payment of the next dividend for a stock.
The date on which a stock goes ex-dividend. is called Ex-Dividend Date, it is typically about three weeks before the dividend is paid to shareholders of record.
Exchange-Traded Fund (ETF)
A fund that tracks the performance of an asset or group of assets, such as Bitcoin ETFs, which make crypto investments accessible via traditional markets.
eXtensible Business Reporting Language (XBRL)
XBRL, or eXtensible Business Reporting Language, is a standardized software framework designed to enhance the communication, compilation, and sharing of financial data. It streamlines the process of reporting by enabling efficient, accurate, and consistent exchange of financial information across different platforms and organizations.
FFCM
An FCM is a Futures Commission Merchant. An FCM is an individual or organization that solicits and/or accepts orders to buy or sell futures contracts, options on futures contracts, retail foreign exchange contracts or swaps and accepts money or other assets from customers to support such orders.
FDI
A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.
Fiat
Government-issued currency such as the Nigerian Naira (NGN), US Dollar (USD), or Euro (EUR).
Fixed Income Fund
A fund or portfolio where bonds are primarily purchased as investments. There is no fixed maturity date and no repayment guarantee.
Fixed Income Security
A security that pays a set rate of interest on a regular basis.
Flat Yield
Alternate term: Running Yield
A measure of short-term returns calculated as a bond's coupon divided by its clean price. It explicitly ignores capital gains or losses on a bond and is therefore not used to calculate total return.
FMDQ
FMDQ is Africa’s first vertically integrated financial market infrastructure (FMI) group, strategically positioned to provide seamless execution, clearing and settlement of financial market transactions across the debt capital, foreign exchange and derivatives markets, through the FMDQ Entities can also refer to Financial Markets Dealers Quotations.
FUD
Short for Fear, Uncertainty and Doubt. This is when negative info, rumors, or propaganda spread intentionally to indite a sense of fear, uncertainty, and doubt among buyers, mostly to cause panic sales and drive prices down.
Fund of funds
A fund that allocates to multiple funds and possibly to direct private transactions as well. One benefit to this approach is that investors gain broad exposure to different strategies and managers for a smaller initial investment (compared to investing in each one separately). In addition, a professional manager selects investments and provides oversight, deciding when to buy, sell or reallocate. Funds of funds tend to have additional fees in compensation for this professional management.
Futures
Financial contracts governing the sale of financial instruments (such as a market index) or physical commodities (such as oil) for future delivery. Participants in futures contracts take positions on what they believe the future value of a financial instrument or commodity will be. Futures are widely used by institutional investors, including collective investment schemes, to in a wide variety of applications, such as controlling risk by hedging or gaining exposure to asset classes.
FX
Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. Foreign exchange transactions can take place on the foreign exchange market, also known as the Forex Market. The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location, rather the forex market is an electronic network of banks, brokers, institutions, and individual traders (mostly trading through brokers or banks).
GGreen Bond
A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. These bonds are typically asset-linked and backed by the issuing entity's balance sheet, so they usually carry the same credit rating as their issuers' other debt obligations.
Gross domestic product (GDP)
This is the total market value of the goods and services produced by a country’s economy during a specified period of time. It includes all final goods and services—that is, those that are produced by the economic agents located in that country regardless of their ownership and that are not resold in any form. It is used throughout the world as the main measure of output and economic activity.
Growth investing
Investment strategy that focuses on stocks of companies and stock funds where earnings are growing rapidly and are expected to continue growing.
Growth stock
Typically, a well-known, successful company that is experiencing rapid growth in earnings and revenue, and usually pays little or no dividend.
Growth-style funds
Growth funds focus on future gains. A growth fund manager will typically invest in stocks with earnings that outperform the current market. The manager attempts to achieve success by focusing on rapidly growing sectors of the economy and investing in leading companies with consistent earnings growth. The fund grows primarily as individual share prices climb.
HHalving
An event where the reward for mining a cryptocurrency is reduced by half, often influencing the coin’s price. Bitcoin halvings occur roughly every four years.
Hedge funds
Hedge funds are private pools of investment capital with broad flexibility to buy or sell a wide range of assets. One common attribute is that they seek to profit from market inefficiencies rather than relying purely on economic growth to drive returns. There is no "one-size- fits-all," and the types of investment strategies pursued by individual hedge funds are extremely diverse.
Hedging
Reducing the risk of adverse price movements in one investment by taking an offsetting position in another investment. For example, an investor might buy an equity and at the same time sell a futures contract under which the equity will be sold at a fixed price. Investors should be aware that the use of derivatives may involve the loss of all the money you invested, and you may have to pay more later.
HODL
A misspelled version of “Hold,” referring to the strategy of keeping cryptocurrency long-term rather than selling during market fluctuations
IICO (Initial Coin Offering)
A fundraising method where new cryptocurrencies or tokens are sold to early backers.
Immutable
The characteristic of a blockchain that ensures once data is recorded, it cannot be altered.
Impact investing
Impacting investing aims to generate specific beneficial social or environmental effects in addition to financial gains. Impact investments may take the form of numerous asset classes and may result in many specific outcomes. The point of impact investing is to use money and investment capital for positive social results.
Index
A statistical composite that measures changes in the economy or in financial markets, often expressed in percentage changes.
Index Fund
A fund that aims to match the returns of a chosen index closely. This is achieved either by using a full replication strategy, which entails holding every share in an index in line with its weighting in the index, or by holding a basket of shares whose aggregate returns are likely to reflect the index returns.
Indexing, Index Tracking
An investment strategy whereby a fund manager aims to match the average performance of a market or group of stocks as represented by an index. iShares use indexing-track strategies.
Inflation
A rise in the prices of goods and services, often equated with loss of purchasing power.
Information ratio
A ratio of portfolio returns above the returns of a benchmark compared to the volatility of those returns. Information Ratio measures a portfolio manager's ability to generate excess returns, but also attempts to identify the consistency of the manager. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. Therefore, a higher Information Ratio equals better risk-adjusted return (i.e., more consistency of outperformance).
Interest rate risk
The sensitivity of a bond or fund to changes in interest rates, as measured by duration. In the event of an interest rate increase, higher interest rate risk (longer duration) would correspond with a decrease in price.
Investment Advisor
An organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices.
Investment Trust
A form of closed-ended investment fund that is structured as a company whose shares trade on a stock market like other listed companies. The number of shares issued by an investment trust is fixed, unless the trust shareholders and management agree to issue further shares. The price of shares in a closed-end fund are subject to the laws of demand and supply and therefore the price may not reflect the net asset value (NAV) of the underlying assets in the fund, but may trade at a premium or discount.
ISIN
International Securities Identification Number. A unique international code which identifies a securities issue. Each country has a national numbering agency which assigns ISIN numbers for securities in that country.’
JJ Curve
The J Curve is an economic theory that explains how a country’s trade deficit may temporarily worsen following a depreciation of its currency. In the short term, higher import prices often outweigh the reduction in import volumes, increasing the nominal value of imports. Over time, as export volumes grow and imports decline further, the trade balance begins to improve, forming the characteristic "J" shape on a graph.
Joint Liability
Joint liability refers to the shared legal obligation of two or more parties to repay a debt or fulfill a liability. This arrangement enables the involved parties to distribute the risks associated with the debt and provides a measure of protection in legal disputes. Individuals bound by joint liability are considered "jointly liable," meaning each party can be held responsible for the full amount if necessary.
Junk bond
A lower-rated, usually higher-yielding bond, with a credit rating of BB or lower.
KK-ratio
K-ratio is a metric used in finance to evaluate the risk-adjusted return of an investment strategy or portfolio.
Key Risk Indicator (KRI)
A key risk indicator (KRI) is a tool used by financial firms to measure their exposure to a given risk at any specific time. By comparing an appropriate set of key risk indicators with internal limits and thresholds, banks can determine whether their operational risk exposures are within their risk appetite.
LLeverage
The use of financial instruments or borrowed funds to amplify performance. In an upward- or downward-trending market, a leveraged investment that is on the correct side of the trend will see magnified gains, while one on the wrong side of the trend will see magnified losses.
Limit Order
A conditional trading instruction, under which a broker must execute only if a pre-specified price level (or better) can be achieved.
Liquidity
Liquidity refers to the frequency at which investors are able to access their investment capital. When investing in alternatives, the liquidity terms of specific funds are aligned to liquidity profiles of the underlying investments. For example, alternative investment mutual funds trade in highly liquid securities (e.g., stocks, bonds), are valued daily and return of capital is within a few days if an investor redeems. Because traditional alternative fund vehicles—hedge funds, for instance—often invest in more complex and less liquid investments, they tend to offer more limited liquidity. Typically, investors must pre-notify the fund of their intention to withdraw capital, and payment of proceeds is at a pre-specified later date. For other long-term investments such as private equity, investors remain committed for longer periods of time (e.g., 5 to 10 years or more). Generally, less liquid investments are expected to offer a higher return to compensate for these constraints, often referred to as an "illiquidity premium."
The more liquid a position, the easier and more cost-effective it will be to trade. Conversely, poor liquidity can translate into difficulties entering and exiting positions, alongside higher trading costs. While most investors trade on the Secondary Market, both Secondary and Primary Markets need to work well to ensure an efficient market with tight spreads, translating into lower costs.
Litecoin (LTC)
A cryptocurrency created as a faster and more lightweight version of Bitcoin.
Local Bitcoins
A peer-to-peer marketplace where users can buy and sell Bitcoin using local payment methods.
Long/Short
An investment strategy that uses leverage to buy securities that are expected to increase in value (go "long") and sell borrowed securities that are expected to decrease in value ("short selling" or "shorting"). The goal of shorting is to buy the same securities back for a lower price at a future date, thereby profiting from the difference. Whereas long-only investing enables profits from a positive outlook on a security, long/short investing also allows the manager to profit from a negative outlook.
MMacaulay Duration
The weighted-average term to maturity of a bond's cash flows. The weighting is based on the present value of each cash flow divided by price.
Market Order
A trading instruction requiring a broker to buy or sell immediately and accept the price that the market provides.
Market Price
The price of an asset determined by market forces of supply and demand.
Market Return
The return on the market portfolio.
Market risk
The possibility that an investment will not achieve its target.
Maturity
The date specified in a note or bond on which the debt is due and payable.
Maturity distribution
The breakdown of a portfolio's assets based on the time frame when the investments will mature.
Median Market Capitalisation
The market value (capitalisation) of the middle stocks in a portfolio when ranked by capitalisation.
Metaverse
A virtual reality space where users can interact digitally, often powered by blockchain technology.
Mining
The process of validating transactions and adding them to the blockchain, often rewarded with cryptocurrency.
Money Market Mutual Fund
A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year and other conservative investments.
Money Market Securities
Money market securities are short-term investments that are highly secure and liquid. They have maturities that can be anywhere from one day to a year. Most have a life of 90 or fewer days, though. They can be issued by governments or private entities.
Mutual Fund
Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.
NNASD
National Association of Securities Dealers. Merged with the NYSE Regulation, Inc. in 2007 to form the organization now known as the Financial Industry Regulatory Authority (FINRA).
Nasdaq
The world's first electronic stock market, launched in 1971 in the US and now home to many household high-tech names. It provides quotes and facilitates trading for around 5,000 actively traded stocks. Nasdaq is a proper noun, origination from the acronym NASDAQ
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed-end fund, the market price may vary significantly from the net asset value.
An exchange traded fund’s (ETF’s) total return calculated using its NAV at the beginning and end of the holding period. This may be different from the ETF's market return. The return earned by investors in the secondary market is the market return, not the NAV return. The return earned by market participants trading in creation units in the primary market is the NAV return.
Net Market Exposure
An indication of the sensitivity of a long/short fund to direction and volatility of markets. Lower net exposure typically means less direct impact from overall market movements.
% LONG SECURITIES – % SHORT SECURITIES = % NET MARKET EXPOSURE
NFT (Non-Fungible Token)
A unique digital asset representing ownership of items such as art, music, or collectibles.
Node
A computer that participates in a blockchain network, validating and relaying transactions.
NSE
Abbreviation of the Nigerian stock exchange
NSE ASI
Abbreviation for the Nigerian all shares index
Number of Holdings
Total number of individual securities in a fund or portfolio.
OOpen-Ended Fund
A widely used collective investment scheme structure employed by a number of exchange traded fund (ETF) families, including iShares funds. Open-ended funds have no limit to the number of shares they can issue, thus enabling them to trade at or close to their net asset value (NAV).
Open Market Operations (OMO)
Open market operations (OMO) refers to a central bank buying or selling short-term Treasuries in the open market in order to influence the money supply, thus influencing short term interest rates. Buying securities adds money to the system, making loans easier to obtain and interest rates decline.
Selling securities from the central bank's balance sheet removes money from the system, making loans more expensive and increasing rates.
Option-adjusted spread (OAS)
A measurement tool for evaluating price differences between bonds with embedded options. A higher OAS typically indicates a riskier bond.
PP/E ratio (Price/Earnings Ratio)
A valuation ratio that compares a company's share price to its earnings per share. Calculated as market value per share divided by earnings per share (EPS).
P2P (Peer-to-Peer)
A direct transaction method between two parties without intermediaries, often facilitated by platforms like Binance P2P or Paxful.
Portfolio
A collection of investments owned by one organization or individual and managed as a collective whole with specific investment goals in mind.
Portfolio allocation
Amount of assets in a portfolio specifically designated for a certain type of investment.
Portfolio Manager
The person or entity responsible for making investment decisions of the portfolio to meet the specific investment objective or goal of the portfolio.
Preferred stock
A class of stock with a fixed dividend that has preference over a company's common stock in the payment of dividends and the liquidation of assets. There are several kinds of preferred stock, among them adjustable-rate and convertible.
The amount by which a bond or stock sells above its par value.
Primary Market
Where the shares of a fund are created or redeemed, allowing Authorised Participants (APs) to exchange the underlying constituents of an ETF, or a cash equivalent, for the ETF shares. With iShares ETFs, there is no single trading desk quoting a price for creation and redemption - the ETF price tracks the weighted average price of the underlying fund constituents. This gives APs confidence that there is no conflict of interest between iShares and their own business and allows for complete transparency.
The price of the fund is always attainable by pricing the underlying constituents, as opposed to receiving a price to create or redeem, given by the provider’s proprietary trading desk. Related term: Secondary market
Private equity
Ownership interest in a company or portion of a company that is not publicly owned, quoted or traded on a stock exchange. From an investment perspective, private equity generally refers to equity-related finance (pools of capital formed through funds or private investors) designed to bring about some sort of change in a private company, such as helping to grow a new business, bringing about operational change, taking a public company private or financing an acquisition.
Proof of Stake (PoS)
A consensus mechanism where validators are chosen based on the number of coins they hold and are willing to “stake.”
Prospectus
Formal written offer to sell securities that sets forth the plan for proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision. Prospectuses are also issued by mutual funds, containing information required by the SEC, such as history, background of managers, fund objectives and policies, financial statement, risks, services and fees.
Proxy
A shareholder vote on matters that require shareholders' approval.
QQuadrix
Quadrix is a stock rating system that ranks stocks within categories to evaluate the investment potential or value.
Quant
A quant is an individual that designs and implements complex trading models and algorithms that allow financial firms to price and trade securities. A quant is also known as a quantitative analyst.
Quote
A quote or quotation is the combination of the highest bid price and the lowest offer price for a security in a market at a specific time.
RRatings
Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities.
Real Estate Investment Trust (REIT)
An investor-owned corporation, trust, or association that sells shares to investors and invests in income-producing property.
Recession
A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country's gross domestic product.
Redemption
Sale of mutual fund shares by a shareholder.
Reinvestment risk
Reinvestment risk is the risk that future cash flows—either coupons (the periodic interest payments on the bond) or the final return of principal—will need to be reinvested in lower-yielding securities.
Reset
A reset rate is a new interest rate that a borrower must pay on the principal of a variable rate loan when a scheduled reset date occurs. The lender will provide details on a loan’s reset terms and interest rate calculations in the borrower’s credit agreement. Also used in derivatives with floating interest payments or fixings.
Ripple (XRP)
A cryptocurrency designed for fast and low-cost international money transfers.
Risk budgeting
An approach to portfolio construction focusing on analysis of its main sources of risk. This approach forecasts expected volatility and correlation between underlying assets and securities to project total portfolio volatility. By using risk budgeting, portfolio managers allocate investments across the portfolio in line with the targeted level of risk.
Risk tolerance
The degree to which you can tolerate volatility in your investment values.
ROI (Return on Investment)
A measure of the profitability of an investment.
Roll Yield
"Rolling" a futures contract means closing out a position in an expiring futures contract and establishing an equivalent position in a contract in the same commodity with a future expiration date.
When the futures curve is upward sloping, i.e., the price of the contract is expected to increase (contango), this results in negative roll yield (loss).
When the futures curve is downward sloping, i.e., the price of the contract is expected to decrease (backwardation), this results in positive roll yield (profit).
SSatoshi
The smallest unit of Bitcoin, equal to 0.00000001 BTC.
SEC
The Securities and Exchange Commission, SEC is a Government Agency Mandated to Regulate and Develop the Nigerian Capital Market. More on sec. Their Mission: “To Develop and Regulate a Capital Market that is Dynamic, Fair, Transparent and Efficient, to Contribute to the Nation's Economic Development.”
Secondary market
The market in which securities are traded after they are initially offered in the primary market. Most trading occurs in the secondary market. The New York Stock Exchange, as well as all other stock exchanges and the bond markets, are secondary markets. Seasoned securities are traded in the secondary market. Related terms: Primary market
Sector
A group of similar securities, such as equities in a specific industry.
Securities
Another name for investments such as stocks or bonds. The name 'securities' comes from the documents that certify an investor's ownership of particular stocks or bonds.
Sell short
To sell assets that you do not own. Short sellers aim to make a profit by selling assets they do not own in the expectation that the assets will fall in value and therefore may be bought at a cheaper price to cover settlement of the trade.
Investors should be aware that the use of derivatives and short positions may involve the loss of all the money you invested, and you may have to pay more later.
A unit of ownership in an investment, such as a share of a stock or a mutual fund.
Signal decay
How quickly new investing "signals" are incorporated into a security's price. An example of a signal would be an analyst increasing the earnings outlook for a company. In efficient markets, that information is incorporated into the security's price quickly, resulting in fast signal decay. In inefficient markets (e.g., certain emerging markets) information tends to be priced in more slowly.
Smart Contract
Self-executing contracts with terms written into code, running on blockchains like Ethereum.
Solana (SOL)
A high-performance blockchain known for its speed and low transaction costs.
Stablecoin
Cryptocurrencies pegged to stable assets like the US Dollar (e.g., USDT, USDC).
Standard deviation
A measure of fund volatility, expressed as a percentage. Standard deviation measures the average variability of a fund's returns over a time period. More stable investments such as money market funds have standard deviations near to zero, while high-risk equity funds usually exhibit higher standard deviations. A standard deviation of 10 indicates that a fund will be within 10% of its mean (average) price for approximately 68% of the time.
Standard & Poor’s Index
Broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks commonly known as the Standard & Poor's 500 or S&P 500.
Stock
A long-term, growth-oriented investment representing ownership in a company; also known as 'equity.'
Stockbroker
A stockbroker is a professional who executes buy and sell orders for stocks and other securities on behalf of clients. A stockbroker may also be known as a registered representative, investment adviser or simply, broker. Stockbrokers are usually associated with a brokerage firm and handle transactions for retail and institutional customers alike. Stockbrokers often receive commissions for their services, but individual compensation can vary greatly depending on where they are employed. Brokerage firms and broker-dealers are also sometimes referred to as stockbrokers themselves. The most referenced stockbroker firms are discount brokers.
Stockholder
The owner of common or preferred stock of a corporation. Also called 'shareholder.'
Stop order
A trading instruction telling a broker when to trade. Once a market has traded to the price level of the stop, this becomes a market order and might be executed at better or worse than the stop level. Stops are commonly used as a risk management mechanism to close positions in order to limit losses.
Style drift
When a fund's investment portfolio moves away from its stated investment objective, for example by investing in assets outside of its target asset class.
TTicker
Short forms used to identify and trade a particular cryptocurrency on exchanges. The ticker of Solana is SOL.
Time horizon
The amount of time that you expect to stay invested in an asset or security.
Token
A digital asset issued on an existing blockchain (e.g., ERC-20 tokens on Ethereum).
Total return
Accounts for all the dividends and interest earned before deductions for fees and expenses, in addition to any changes in the value of the principal, including share price, assuming the funds' dividends and capital gains are reinvested. Often, this percentage is presented in a specified period (one, five, ten years and/or life of fund). Also, a method of calculating an investment's return that takes share price changes and dividends into account.
Tracker Fund, Trackers
Alternate term: Expense Ratio
The expenses paid by a product to cover management fees, the trustee's fee, license fees and operational costs such as trading and custody. TER is expressed as a percentage of a product's assets. It does not include the commissions paid to brokers on the purchase and sale of iShares products. Fund, Trackers
Tracking Error
The amount by which a fund's performance deviates from the performance of its benchmark index. Index funds, which aim to match the performance of their benchmark indices, usually have low tracking error. However, some degree of tracking error is to be expected in index funds, including iShares funds, because of management and trading costs and fees. See also Active Manager Risk (Predicted Tracking Error).
Trading Pair
A pair of cryptocurrencies that can be traded for each other on an exchange (e.g., BTC/ETH).
Transaction Fee
A small fee paid to miners or validators to process a blockchain transaction.
Transparency
Transparency refers to the level of disclosure and access to portfolio reporting, such as underlying holdings and risk metrics (i.e., not just portfolio performance). For certain fund types such as alternative investment mutual funds, specific transparency and reporting is mandated. For other types of funds, transparency is often optional and at the discretion of the fund manager.
Treasury Bills
These are government bonds or debt securities with maturity of less than a year.
Trustee
- An organization or individual who has responsibility for one or more
- An individual who, as part of a fund's board of trustees, has ultimate responsibility for a fund's
UUmbrella Fund
An umbrella fund is a collective investment scheme that exists as a single legal entity but has several distinct sub-funds which, in effect, are traded as individual investment funds.
Undervalued
The term "undervalued" refers to a security or investment that is trading at a market price believed to be below its intrinsic value. This discrepancy often suggests that the asset is mispriced due to market inefficiencies, presenting a potential opportunity for investors to buy at a discount relative to its true worth.
Uptrend
An uptrend refers to the upward movement in the price of a financial asset, characterized by a consistent pattern of higher highs and higher lows. This indicates sustained positive momentum, with each successive peak and trough surpassing those of the preceding trend.
VValuation
An estimate of the value or worth of a company; the price investors assign to an individual stock.
Value investing
A strategy whereby investors purchase equity securities that they believe are selling below estimated true value. The investor can profit by buying these securities then selling them once they appreciate to their real value.
Value stock
Typically, an overlooked or underpriced company that is growing at slower rates.
Venture capital
Funding provided by investors to start-up companies with less access to capital markets but a high potential for growth. Typically, venture capital investments have a high-risk profile but also the potential for above-average returns.
Volatility
Variations in the performance of an investment, commonly measured by standard deviation relative to a mean or benchmark. High volatility is associated with higher risk, as large swings in performance can make it more difficult to anticipate the outcome of an investment over the long term.
WWallet
A digital tool used to store and manage cryptocurrencies, such as Trust Wallet or MetaMask.
Weighted Average Coupon
The sum of a bond's coupons weighted by market value.
Weighted Average Market Cap
Most indexes are constructed by weighting the market capitalization of each stock on the index. In such an index, larger companies account for a greater portion of the index. An example is the S&P 500 Index.
Weighted Average Maturity
A Fund's WAM calculates an average time to maturity of all the securities held in the portfolio, weighted by each security's percentage of net assets. The calculation considers the final maturity for a fixed income security and the interest rate reset date for floating rate securities held in the portfolio. This is a way to measure a fund's sensitivity to potential interest rate changes
Whale
An individual or entity holding a large amount of cryptocurrency, often capable of influencing the market.
Wrapped Token
A token representing another cryptocurrency on a different blockchain (e.g., Wrapped Bitcoin (WBTC) on Ethereum).
XX-Efficiency
X-efficiency describes how effectively a firm utilizes its resources under conditions of imperfect competition. It measures the extent to which a company achieves maximum output from its available inputs, such as labor, capital, and materials. In this context, efficiency encompasses areas like employee productivity, operational processes, and manufacturing performance.
Xenocurrency
In finance, the term xenocurrency is used to describe any currency that is deposited or exchanged outside of its domestic borders or country of origin. This includes currencies that are not widely traded or used outside of their home country, as well as major currencies like the US dollar, the Euro and the Japanese yen, which are traded globally. The name is derived from the Greek prefix xeno, which means foreign.
YYield
Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price.
Yield curve
A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity. There are three main types of yield curve shapes: normal (upward sloping curve), inverted (downward sloping curve) and flat.
Yield Farming
A DeFi strategy where users earn rewards by providing liquidity to protocols.
Yield to maturity
Yield that would be realized on a bond or other fixed income security if the bond were to be held to its maturity date. If a bond is selling at a discount, the yield to maturity will be greater than the current yield. If a bond is selling at a premium, the yield to maturity will be less than the current yield.
YTD Return (w load)
Year-to-date return on an investment including appreciation and dividends or interest, minus any applicable expenses or charges.
YTD total return
Year-to-date return on an investment including appreciation and dividends or interest.
ZZ-spread
The Zero-volatility spread (Z-spread) is the constant spread that makes the price of a security equal to the present value of its cash flows when added to the yield at each point on the risk-free benchmark curve where cash flow is received. In other words, each cash flow is discounted at the appropriate risk-free benchmark rate plus the Z-spread.
Zcash (ZEC)
A privacy-focused cryptocurrency offering users the choice of shielded transactions to enhance confidentiality.
Zero-Knowledge Proof
A cryptographic method allowing one party to prove the validity of information without revealing the information itself.
A fund that aims to provide above-average performance by using human judgement and/or quantitative tools to select and trade stocks and asset classes. Active fund managers try to outperform indices or meet specific total return targets. Index fund managers, by contrast, try to match the performance of indices as closely as possible.
An investment manager's return relative to the return of a benchmark.
Any cryptocurrency that is not Bitcoin, such as Ethereum (ETH), Binance Coin (BNB), or Solana (SOL).
Regulations and processes designed to prevent illegal financial activities, especially in the crypto space.
The yearly audited record of a corporation or a mutual fund's condition and performance that is distributed to shareholders.
The percentage by value of stocks in a portfolio that are sold and replaced with new stocks each year. Index funds tend to have much lower turnover than active funds and are therefore likely to have fewer trading costs to pass on to investors and detract from performance.
A procedure where figures covering a period of less than one year are extended to cover a 12-month period.
The average annual return over a period of years, considering the effect of compounding. Annualized rate of return also can be called compound growth rate.
To buy a coin or to swap another cryptocurrency for a different one
The increase in value of a financial asset.
Profiting from differences in the prices quoted for a stock. Arbitrageurs simultaneously purchase and sell the same stock, usually on different exchanges or marketplaces. In the case of iShares funds, market participants use arbitrage to make a profit by buying and selling iShares funds and their underlying stocks in the primary and secondary markets for iShares funds. This benefits all investors in the iShares secondary market - whether institutions or individuals - by helping to keep the market price of iShares funds close to the value of their underlying stocks.
Mutual funds that seek both growth and income in a portfolio with a mix of common stock, preferred stock or bonds. The companies selected typically are in different industries and different geographic regions.
A unit of measure, equal to 1/100th of 1%, or 0.01%
A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. A market in which prices decline sharply against a background of widespread pessimism, growing unemployment or business recession. The opposite of a bull market.
A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund.
A measure of volatility showing how volatile stocks or funds are relative to their benchmark indices. A benchmark index has a fixed beta of 1. A stock or fund with a beta of more than 1 moves up and down more than the market, while the value of a stock or fund with a beta of less than 1 will fluctuate less than the market.
The highest price that buyers are willing to pay for a security. Related terms: offer price, spread.
The first and most popular cryptocurrency, created by an anonymous entity called Satoshi Nakamoto.
A decentralized ledger that records all cryptocurrency transactions across a network of computers.
An investment in which ownership equity is acquired in an existing company or division of a company. The seller could be the parent company, public shareholders or a private equity investor. Most buyouts involve significant leverage and are known as leveraged buyouts (LBOs). If the present management of the business participates in the buyout, the transaction is known as a management buyout (MBO).
The difference between a security's purchase price and its selling price, when the difference is positive.
The amount by which the proceeds from a sale of a security are less than its purchase price.
The market value of a company, calculated by multiplying the number of shares outstanding by the price per share.
A short-term money-market instrument, such as a Treasury bill or repurchase agreement, of such high liquidity and safety that it is easily converted into cash.
The price quoted for a bond excluding accrued interest.
A standalone cryptocurrency with its own blockchain (e.g., Bitcoin, Ethereum).
A cryptocurrency wallet that is not connected to the internet, offering a higher level of security.
A fund that gives investors access to a diversified portfolio of investments. Some collective investment schemes specialize, for example by investing purely in equities issued by large companies in a particular country or market. Other collective investment schemes may provide access to a range of assets or markets. Each shareholder in a collective investment scheme participates in the gains or losses made by the fund. Many collective investment schemes are open-ended funds and are therefore able to create and redeem shares as demand for shares increases or declines. iShares funds are examples of open-ended collective investment schemes that aim to reflect the returns of market indices.
The fee paid to a broker on each purchase or sale of a security. iShares products are dealt through brokers and commission is therefore payable on the purchase or sale of iShares products. Private investors who trade frequently or invest regularly should take this into account when deciding whether iShares products are an appropriate vehicle for their investment needs.
A financial instrument whereby an investor enters into a contract with a financial institution to receive or pay the difference between the value of an index on the day the contract is settled and the day it matures. In using CFDs investors risk losing more money than they originally invested.
Mental strategies or justifications that people use to deal with negative outcomes, such as losses or missing out on profitable trades.
Part of the core holdings in a core-satellite portfolio. Core building blocks usually provide long-term exposure to an entire market or geographic region. They are therefore usually highly diversified and exhibit relatively low risk. For many investors, index funds provide the most efficient and inexpensive tools for combining core building blocks into a core portfolio. For example, an investor might use a variety of iShares products as building blocks to establish long-term, lower-risk core investments around which active investment strategies may be employed to boost performance.
A bank that holds a mutual fund's assets, settles all portfolio trades and collects most of the valuation data required to calculate a fund's net asset value (NAV).
The time of day when a transaction can no longer be accepted for that trading day.
The DMO was established on 4th October 2000 to centrally coordinate the management of Nigeria’s debt. A major objective of the DMO is good debt management practices that make positive impact on economic growth and national development, particularly in reducing debt stock and cost of public debt servicing in a manner that saves resources for investment in poverty reduction programs.
Financial services built on blockchain technology that operate without traditional intermediaries like banks.
Contracts entered for the purpose of exchanging value on underlying securities or physical assets. Generally, derivatives are used for operational efficiency or to control transaction costs.
A formal statement saying that you are not legally responsible for something, such as the information given in a book or on the internet, or that you have no direct involvement in it.
An ETF that trades in the secondary market at a price less than its net asset value (NAV) is said to trade at a discount to its NAV. An ETF that trades in the secondary market at a price that is higher than its NAV is said to trade at a premium to its NAV. iShares ETFs may trade above or below their NAVs. However, iShares ETFs' open-ended structure and the mechanism used to create and redeem iShares ETFs are designed to continually move the market price of iShares funds towards their NAVs. iShares funds are therefore highly unlikely to experience the prolonged periods of discount or premium to NAV experienced by many closed-ended funds.
Spreading risk by investing in a variety of asset classes, sectors or geographical regions. The aim of diversification is to increase the likelihood that losses from one investment will be offset by gains from another investment and thus reduce the risk that all the investments in a portfolio will decline in value at the same time.
A dividend is a portion of a company's profit paid to common and preferred shareholders. Dividends provide an incentive to own stock in stable companies even if they are not experiencing much growth. Companies are not required to pay dividends.
An investment strategy where you invest a fixed amount of money at regular intervals, regardless of the asset’s price.
An indication of a company's profitability. The portion of a company's profit allocated to each outstanding share. Calculated as:
- Net Income - Dividends on Preferred Stock.
- Average outstanding shares
A measure of a bond's sensitivity to interest rate changes. Like modified duration, effective duration approximates the change in a bond's price given a change in yield. Effective duration deals with embedded options within bonds, whereas modified duration is used only when all bonds under consideration are option free.
Shares issued by a company which represent ownership in it. Ownership of property, usually in the form of common stocks, as distinguished from fixed-income securities such as bonds or mortgages. Stock funds may vary depending on the fund's investment objective.
A mutual fund/collective fund in which the money is invested primarily in common and/or preferred stock. Stock funds may vary, depending on the fund's investment objective.
The second-largest cryptocurrency by market capitalization, known for its smart contract functionality.
The eurobond is a type of bond that is issued in a currency that is different from that of the country or market in which it is issued. Despite its name, it has no particular connection to Europe or the euro currency. Due to this external currency characteristic, these types of bonds are also known as external bonds.
The interval between the announcement and the payment of the next dividend for a stock.
The date on which a stock goes ex-dividend. is called Ex-Dividend Date, it is typically about three weeks before the dividend is paid to shareholders of record.
A fund that tracks the performance of an asset or group of assets, such as Bitcoin ETFs, which make crypto investments accessible via traditional markets.
XBRL, or eXtensible Business Reporting Language, is a standardized software framework designed to enhance the communication, compilation, and sharing of financial data. It streamlines the process of reporting by enabling efficient, accurate, and consistent exchange of financial information across different platforms and organizations.
An FCM is a Futures Commission Merchant. An FCM is an individual or organization that solicits and/or accepts orders to buy or sell futures contracts, options on futures contracts, retail foreign exchange contracts or swaps and accepts money or other assets from customers to support such orders.
A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.
Government-issued currency such as the Nigerian Naira (NGN), US Dollar (USD), or Euro (EUR).
A fund or portfolio where bonds are primarily purchased as investments. There is no fixed maturity date and no repayment guarantee.
A security that pays a set rate of interest on a regular basis.
Alternate term: Running Yield
A measure of short-term returns calculated as a bond's coupon divided by its clean price. It explicitly ignores capital gains or losses on a bond and is therefore not used to calculate total return.
FMDQ is Africa’s first vertically integrated financial market infrastructure (FMI) group, strategically positioned to provide seamless execution, clearing and settlement of financial market transactions across the debt capital, foreign exchange and derivatives markets, through the FMDQ Entities can also refer to Financial Markets Dealers Quotations.
Short for Fear, Uncertainty and Doubt. This is when negative info, rumors, or propaganda spread intentionally to indite a sense of fear, uncertainty, and doubt among buyers, mostly to cause panic sales and drive prices down.
A fund that allocates to multiple funds and possibly to direct private transactions as well. One benefit to this approach is that investors gain broad exposure to different strategies and managers for a smaller initial investment (compared to investing in each one separately). In addition, a professional manager selects investments and provides oversight, deciding when to buy, sell or reallocate. Funds of funds tend to have additional fees in compensation for this professional management.
Financial contracts governing the sale of financial instruments (such as a market index) or physical commodities (such as oil) for future delivery. Participants in futures contracts take positions on what they believe the future value of a financial instrument or commodity will be. Futures are widely used by institutional investors, including collective investment schemes, to in a wide variety of applications, such as controlling risk by hedging or gaining exposure to asset classes.
Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. Foreign exchange transactions can take place on the foreign exchange market, also known as the Forex Market. The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location, rather the forex market is an electronic network of banks, brokers, institutions, and individual traders (mostly trading through brokers or banks).
A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. These bonds are typically asset-linked and backed by the issuing entity's balance sheet, so they usually carry the same credit rating as their issuers' other debt obligations.
This is the total market value of the goods and services produced by a country’s economy during a specified period of time. It includes all final goods and services—that is, those that are produced by the economic agents located in that country regardless of their ownership and that are not resold in any form. It is used throughout the world as the main measure of output and economic activity.
Investment strategy that focuses on stocks of companies and stock funds where earnings are growing rapidly and are expected to continue growing.
Typically, a well-known, successful company that is experiencing rapid growth in earnings and revenue, and usually pays little or no dividend.
Growth funds focus on future gains. A growth fund manager will typically invest in stocks with earnings that outperform the current market. The manager attempts to achieve success by focusing on rapidly growing sectors of the economy and investing in leading companies with consistent earnings growth. The fund grows primarily as individual share prices climb.
An event where the reward for mining a cryptocurrency is reduced by half, often influencing the coin’s price. Bitcoin halvings occur roughly every four years.
Hedge funds are private pools of investment capital with broad flexibility to buy or sell a wide range of assets. One common attribute is that they seek to profit from market inefficiencies rather than relying purely on economic growth to drive returns. There is no "one-size- fits-all," and the types of investment strategies pursued by individual hedge funds are extremely diverse.
Reducing the risk of adverse price movements in one investment by taking an offsetting position in another investment. For example, an investor might buy an equity and at the same time sell a futures contract under which the equity will be sold at a fixed price. Investors should be aware that the use of derivatives may involve the loss of all the money you invested, and you may have to pay more later.
A misspelled version of “Hold,” referring to the strategy of keeping cryptocurrency long-term rather than selling during market fluctuations
A fundraising method where new cryptocurrencies or tokens are sold to early backers.
The characteristic of a blockchain that ensures once data is recorded, it cannot be altered.
Impacting investing aims to generate specific beneficial social or environmental effects in addition to financial gains. Impact investments may take the form of numerous asset classes and may result in many specific outcomes. The point of impact investing is to use money and investment capital for positive social results.
A statistical composite that measures changes in the economy or in financial markets, often expressed in percentage changes.
A fund that aims to match the returns of a chosen index closely. This is achieved either by using a full replication strategy, which entails holding every share in an index in line with its weighting in the index, or by holding a basket of shares whose aggregate returns are likely to reflect the index returns.
An investment strategy whereby a fund manager aims to match the average performance of a market or group of stocks as represented by an index. iShares use indexing-track strategies.
A rise in the prices of goods and services, often equated with loss of purchasing power.
A ratio of portfolio returns above the returns of a benchmark compared to the volatility of those returns. Information Ratio measures a portfolio manager's ability to generate excess returns, but also attempts to identify the consistency of the manager. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. Therefore, a higher Information Ratio equals better risk-adjusted return (i.e., more consistency of outperformance).
The sensitivity of a bond or fund to changes in interest rates, as measured by duration. In the event of an interest rate increase, higher interest rate risk (longer duration) would correspond with a decrease in price.
An organization employed by a mutual fund to give professional advice on the fund's investments and asset management practices.
A form of closed-ended investment fund that is structured as a company whose shares trade on a stock market like other listed companies. The number of shares issued by an investment trust is fixed, unless the trust shareholders and management agree to issue further shares. The price of shares in a closed-end fund are subject to the laws of demand and supply and therefore the price may not reflect the net asset value (NAV) of the underlying assets in the fund, but may trade at a premium or discount.
International Securities Identification Number. A unique international code which identifies a securities issue. Each country has a national numbering agency which assigns ISIN numbers for securities in that country.’
The J Curve is an economic theory that explains how a country’s trade deficit may temporarily worsen following a depreciation of its currency. In the short term, higher import prices often outweigh the reduction in import volumes, increasing the nominal value of imports. Over time, as export volumes grow and imports decline further, the trade balance begins to improve, forming the characteristic "J" shape on a graph.
Joint liability refers to the shared legal obligation of two or more parties to repay a debt or fulfill a liability. This arrangement enables the involved parties to distribute the risks associated with the debt and provides a measure of protection in legal disputes. Individuals bound by joint liability are considered "jointly liable," meaning each party can be held responsible for the full amount if necessary.
A lower-rated, usually higher-yielding bond, with a credit rating of BB or lower.
K-ratio is a metric used in finance to evaluate the risk-adjusted return of an investment strategy or portfolio.
A key risk indicator (KRI) is a tool used by financial firms to measure their exposure to a given risk at any specific time. By comparing an appropriate set of key risk indicators with internal limits and thresholds, banks can determine whether their operational risk exposures are within their risk appetite.
The use of financial instruments or borrowed funds to amplify performance. In an upward- or downward-trending market, a leveraged investment that is on the correct side of the trend will see magnified gains, while one on the wrong side of the trend will see magnified losses.
A conditional trading instruction, under which a broker must execute only if a pre-specified price level (or better) can be achieved.
Liquidity refers to the frequency at which investors are able to access their investment capital. When investing in alternatives, the liquidity terms of specific funds are aligned to liquidity profiles of the underlying investments. For example, alternative investment mutual funds trade in highly liquid securities (e.g., stocks, bonds), are valued daily and return of capital is within a few days if an investor redeems. Because traditional alternative fund vehicles—hedge funds, for instance—often invest in more complex and less liquid investments, they tend to offer more limited liquidity. Typically, investors must pre-notify the fund of their intention to withdraw capital, and payment of proceeds is at a pre-specified later date. For other long-term investments such as private equity, investors remain committed for longer periods of time (e.g., 5 to 10 years or more). Generally, less liquid investments are expected to offer a higher return to compensate for these constraints, often referred to as an "illiquidity premium."
The more liquid a position, the easier and more cost-effective it will be to trade. Conversely, poor liquidity can translate into difficulties entering and exiting positions, alongside higher trading costs. While most investors trade on the Secondary Market, both Secondary and Primary Markets need to work well to ensure an efficient market with tight spreads, translating into lower costs.
A cryptocurrency created as a faster and more lightweight version of Bitcoin.
A peer-to-peer marketplace where users can buy and sell Bitcoin using local payment methods.
An investment strategy that uses leverage to buy securities that are expected to increase in value (go "long") and sell borrowed securities that are expected to decrease in value ("short selling" or "shorting"). The goal of shorting is to buy the same securities back for a lower price at a future date, thereby profiting from the difference. Whereas long-only investing enables profits from a positive outlook on a security, long/short investing also allows the manager to profit from a negative outlook.
The weighted-average term to maturity of a bond's cash flows. The weighting is based on the present value of each cash flow divided by price.
A trading instruction requiring a broker to buy or sell immediately and accept the price that the market provides.
The price of an asset determined by market forces of supply and demand.
The return on the market portfolio.
The possibility that an investment will not achieve its target.
The date specified in a note or bond on which the debt is due and payable.
The breakdown of a portfolio's assets based on the time frame when the investments will mature.
The market value (capitalisation) of the middle stocks in a portfolio when ranked by capitalisation.
A virtual reality space where users can interact digitally, often powered by blockchain technology.
The process of validating transactions and adding them to the blockchain, often rewarded with cryptocurrency.
A short-term investment that seeks to protect principal and generate income by investing in Treasury bills, CDs with maturities less than one year and other conservative investments.
Money market securities are short-term investments that are highly secure and liquid. They have maturities that can be anywhere from one day to a year. Most have a life of 90 or fewer days, though. They can be issued by governments or private entities.
Fund operated by an investment company that raises money from shareholders and invests it in stocks, bonds, options, commodities or money market securities.
National Association of Securities Dealers. Merged with the NYSE Regulation, Inc. in 2007 to form the organization now known as the Financial Industry Regulatory Authority (FINRA).
The world's first electronic stock market, launched in 1971 in the US and now home to many household high-tech names. It provides quotes and facilitates trading for around 5,000 actively traded stocks. Nasdaq is a proper noun, origination from the acronym NASDAQ
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed-end fund, the market price may vary significantly from the net asset value.
An exchange traded fund’s (ETF’s) total return calculated using its NAV at the beginning and end of the holding period. This may be different from the ETF's market return. The return earned by investors in the secondary market is the market return, not the NAV return. The return earned by market participants trading in creation units in the primary market is the NAV return.
An indication of the sensitivity of a long/short fund to direction and volatility of markets. Lower net exposure typically means less direct impact from overall market movements.
% LONG SECURITIES – % SHORT SECURITIES = % NET MARKET EXPOSURE
A unique digital asset representing ownership of items such as art, music, or collectibles.
A computer that participates in a blockchain network, validating and relaying transactions.
Abbreviation of the Nigerian stock exchange
Abbreviation for the Nigerian all shares index
Total number of individual securities in a fund or portfolio.
A widely used collective investment scheme structure employed by a number of exchange traded fund (ETF) families, including iShares funds. Open-ended funds have no limit to the number of shares they can issue, thus enabling them to trade at or close to their net asset value (NAV).
Open market operations (OMO) refers to a central bank buying or selling short-term Treasuries in the open market in order to influence the money supply, thus influencing short term interest rates. Buying securities adds money to the system, making loans easier to obtain and interest rates decline.
Selling securities from the central bank's balance sheet removes money from the system, making loans more expensive and increasing rates.
A measurement tool for evaluating price differences between bonds with embedded options. A higher OAS typically indicates a riskier bond.
A valuation ratio that compares a company's share price to its earnings per share. Calculated as market value per share divided by earnings per share (EPS).
A direct transaction method between two parties without intermediaries, often facilitated by platforms like Binance P2P or Paxful.
A collection of investments owned by one organization or individual and managed as a collective whole with specific investment goals in mind.
Amount of assets in a portfolio specifically designated for a certain type of investment.
The person or entity responsible for making investment decisions of the portfolio to meet the specific investment objective or goal of the portfolio.
A class of stock with a fixed dividend that has preference over a company's common stock in the payment of dividends and the liquidation of assets. There are several kinds of preferred stock, among them adjustable-rate and convertible.
The amount by which a bond or stock sells above its par value.
Where the shares of a fund are created or redeemed, allowing Authorised Participants (APs) to exchange the underlying constituents of an ETF, or a cash equivalent, for the ETF shares. With iShares ETFs, there is no single trading desk quoting a price for creation and redemption - the ETF price tracks the weighted average price of the underlying fund constituents. This gives APs confidence that there is no conflict of interest between iShares and their own business and allows for complete transparency.
The price of the fund is always attainable by pricing the underlying constituents, as opposed to receiving a price to create or redeem, given by the provider’s proprietary trading desk. Related term: Secondary market
Ownership interest in a company or portion of a company that is not publicly owned, quoted or traded on a stock exchange. From an investment perspective, private equity generally refers to equity-related finance (pools of capital formed through funds or private investors) designed to bring about some sort of change in a private company, such as helping to grow a new business, bringing about operational change, taking a public company private or financing an acquisition.
A consensus mechanism where validators are chosen based on the number of coins they hold and are willing to “stake.”
Formal written offer to sell securities that sets forth the plan for proposed business enterprise or the facts concerning an existing one that an investor needs to make an informed decision. Prospectuses are also issued by mutual funds, containing information required by the SEC, such as history, background of managers, fund objectives and policies, financial statement, risks, services and fees.
A shareholder vote on matters that require shareholders' approval.
Quadrix is a stock rating system that ranks stocks within categories to evaluate the investment potential or value.
A quant is an individual that designs and implements complex trading models and algorithms that allow financial firms to price and trade securities. A quant is also known as a quantitative analyst.
A quote or quotation is the combination of the highest bid price and the lowest offer price for a security in a market at a specific time.
Evaluations of the credit quality of bonds usually made by independent rating services. Ratings generally measure the probability of timely repayment of principal and interest on debt securities.
An investor-owned corporation, trust, or association that sells shares to investors and invests in income-producing property.
A downturn in economic activity, defined by many economists as at least two consecutive quarters of decline in a country's gross domestic product.
Sale of mutual fund shares by a shareholder.
Reinvestment risk is the risk that future cash flows—either coupons (the periodic interest payments on the bond) or the final return of principal—will need to be reinvested in lower-yielding securities.
A reset rate is a new interest rate that a borrower must pay on the principal of a variable rate loan when a scheduled reset date occurs. The lender will provide details on a loan’s reset terms and interest rate calculations in the borrower’s credit agreement. Also used in derivatives with floating interest payments or fixings.
A cryptocurrency designed for fast and low-cost international money transfers.
An approach to portfolio construction focusing on analysis of its main sources of risk. This approach forecasts expected volatility and correlation between underlying assets and securities to project total portfolio volatility. By using risk budgeting, portfolio managers allocate investments across the portfolio in line with the targeted level of risk.
The degree to which you can tolerate volatility in your investment values.
A measure of the profitability of an investment.
"Rolling" a futures contract means closing out a position in an expiring futures contract and establishing an equivalent position in a contract in the same commodity with a future expiration date.
When the futures curve is upward sloping, i.e., the price of the contract is expected to increase (contango), this results in negative roll yield (loss).
When the futures curve is downward sloping, i.e., the price of the contract is expected to decrease (backwardation), this results in positive roll yield (profit).
The smallest unit of Bitcoin, equal to 0.00000001 BTC.
The Securities and Exchange Commission, SEC is a Government Agency Mandated to Regulate and Develop the Nigerian Capital Market. More on sec. Their Mission: “To Develop and Regulate a Capital Market that is Dynamic, Fair, Transparent and Efficient, to Contribute to the Nation's Economic Development.”
The market in which securities are traded after they are initially offered in the primary market. Most trading occurs in the secondary market. The New York Stock Exchange, as well as all other stock exchanges and the bond markets, are secondary markets. Seasoned securities are traded in the secondary market. Related terms: Primary market
A group of similar securities, such as equities in a specific industry.
Another name for investments such as stocks or bonds. The name 'securities' comes from the documents that certify an investor's ownership of particular stocks or bonds.
To sell assets that you do not own. Short sellers aim to make a profit by selling assets they do not own in the expectation that the assets will fall in value and therefore may be bought at a cheaper price to cover settlement of the trade.
Investors should be aware that the use of derivatives and short positions may involve the loss of all the money you invested, and you may have to pay more later.
A unit of ownership in an investment, such as a share of a stock or a mutual fund.
How quickly new investing "signals" are incorporated into a security's price. An example of a signal would be an analyst increasing the earnings outlook for a company. In efficient markets, that information is incorporated into the security's price quickly, resulting in fast signal decay. In inefficient markets (e.g., certain emerging markets) information tends to be priced in more slowly.
Self-executing contracts with terms written into code, running on blockchains like Ethereum.
A high-performance blockchain known for its speed and low transaction costs.
Cryptocurrencies pegged to stable assets like the US Dollar (e.g., USDT, USDC).
A measure of fund volatility, expressed as a percentage. Standard deviation measures the average variability of a fund's returns over a time period. More stable investments such as money market funds have standard deviations near to zero, while high-risk equity funds usually exhibit higher standard deviations. A standard deviation of 10 indicates that a fund will be within 10% of its mean (average) price for approximately 68% of the time.
Broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks commonly known as the Standard & Poor's 500 or S&P 500.
A long-term, growth-oriented investment representing ownership in a company; also known as 'equity.'
A stockbroker is a professional who executes buy and sell orders for stocks and other securities on behalf of clients. A stockbroker may also be known as a registered representative, investment adviser or simply, broker. Stockbrokers are usually associated with a brokerage firm and handle transactions for retail and institutional customers alike. Stockbrokers often receive commissions for their services, but individual compensation can vary greatly depending on where they are employed. Brokerage firms and broker-dealers are also sometimes referred to as stockbrokers themselves. The most referenced stockbroker firms are discount brokers.
The owner of common or preferred stock of a corporation. Also called 'shareholder.'
A trading instruction telling a broker when to trade. Once a market has traded to the price level of the stop, this becomes a market order and might be executed at better or worse than the stop level. Stops are commonly used as a risk management mechanism to close positions in order to limit losses.
When a fund's investment portfolio moves away from its stated investment objective, for example by investing in assets outside of its target asset class.
Short forms used to identify and trade a particular cryptocurrency on exchanges. The ticker of Solana is SOL.
The amount of time that you expect to stay invested in an asset or security.
A digital asset issued on an existing blockchain (e.g., ERC-20 tokens on Ethereum).
Accounts for all the dividends and interest earned before deductions for fees and expenses, in addition to any changes in the value of the principal, including share price, assuming the funds' dividends and capital gains are reinvested. Often, this percentage is presented in a specified period (one, five, ten years and/or life of fund). Also, a method of calculating an investment's return that takes share price changes and dividends into account.
Alternate term: Expense Ratio
The expenses paid by a product to cover management fees, the trustee's fee, license fees and operational costs such as trading and custody. TER is expressed as a percentage of a product's assets. It does not include the commissions paid to brokers on the purchase and sale of iShares products. Fund, Trackers
The amount by which a fund's performance deviates from the performance of its benchmark index. Index funds, which aim to match the performance of their benchmark indices, usually have low tracking error. However, some degree of tracking error is to be expected in index funds, including iShares funds, because of management and trading costs and fees. See also Active Manager Risk (Predicted Tracking Error).
A pair of cryptocurrencies that can be traded for each other on an exchange (e.g., BTC/ETH).
A small fee paid to miners or validators to process a blockchain transaction.
Transparency refers to the level of disclosure and access to portfolio reporting, such as underlying holdings and risk metrics (i.e., not just portfolio performance). For certain fund types such as alternative investment mutual funds, specific transparency and reporting is mandated. For other types of funds, transparency is often optional and at the discretion of the fund manager.
These are government bonds or debt securities with maturity of less than a year.
- An organization or individual who has responsibility for one or more
- An individual who, as part of a fund's board of trustees, has ultimate responsibility for a fund's
An umbrella fund is a collective investment scheme that exists as a single legal entity but has several distinct sub-funds which, in effect, are traded as individual investment funds.
The term "undervalued" refers to a security or investment that is trading at a market price believed to be below its intrinsic value. This discrepancy often suggests that the asset is mispriced due to market inefficiencies, presenting a potential opportunity for investors to buy at a discount relative to its true worth.
An uptrend refers to the upward movement in the price of a financial asset, characterized by a consistent pattern of higher highs and higher lows. This indicates sustained positive momentum, with each successive peak and trough surpassing those of the preceding trend.
An estimate of the value or worth of a company; the price investors assign to an individual stock.
A strategy whereby investors purchase equity securities that they believe are selling below estimated true value. The investor can profit by buying these securities then selling them once they appreciate to their real value.
Typically, an overlooked or underpriced company that is growing at slower rates.
Funding provided by investors to start-up companies with less access to capital markets but a high potential for growth. Typically, venture capital investments have a high-risk profile but also the potential for above-average returns.
Variations in the performance of an investment, commonly measured by standard deviation relative to a mean or benchmark. High volatility is associated with higher risk, as large swings in performance can make it more difficult to anticipate the outcome of an investment over the long term.
A digital tool used to store and manage cryptocurrencies, such as Trust Wallet or MetaMask.
The sum of a bond's coupons weighted by market value.
Most indexes are constructed by weighting the market capitalization of each stock on the index. In such an index, larger companies account for a greater portion of the index. An example is the S&P 500 Index.
A Fund's WAM calculates an average time to maturity of all the securities held in the portfolio, weighted by each security's percentage of net assets. The calculation considers the final maturity for a fixed income security and the interest rate reset date for floating rate securities held in the portfolio. This is a way to measure a fund's sensitivity to potential interest rate changes
An individual or entity holding a large amount of cryptocurrency, often capable of influencing the market.
A token representing another cryptocurrency on a different blockchain (e.g., Wrapped Bitcoin (WBTC) on Ethereum).
X-efficiency describes how effectively a firm utilizes its resources under conditions of imperfect competition. It measures the extent to which a company achieves maximum output from its available inputs, such as labor, capital, and materials. In this context, efficiency encompasses areas like employee productivity, operational processes, and manufacturing performance.
In finance, the term xenocurrency is used to describe any currency that is deposited or exchanged outside of its domestic borders or country of origin. This includes currencies that are not widely traded or used outside of their home country, as well as major currencies like the US dollar, the Euro and the Japanese yen, which are traded globally. The name is derived from the Greek prefix xeno, which means foreign.
Annual percentage rate of return on capital. The dividend or interest paid by a company expressed as a percentage of the current price.
A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity. There are three main types of yield curve shapes: normal (upward sloping curve), inverted (downward sloping curve) and flat.
A DeFi strategy where users earn rewards by providing liquidity to protocols.
Yield that would be realized on a bond or other fixed income security if the bond were to be held to its maturity date. If a bond is selling at a discount, the yield to maturity will be greater than the current yield. If a bond is selling at a premium, the yield to maturity will be less than the current yield.
Year-to-date return on an investment including appreciation and dividends or interest, minus any applicable expenses or charges.
Year-to-date return on an investment including appreciation and dividends or interest.
The Zero-volatility spread (Z-spread) is the constant spread that makes the price of a security equal to the present value of its cash flows when added to the yield at each point on the risk-free benchmark curve where cash flow is received. In other words, each cash flow is discounted at the appropriate risk-free benchmark rate plus the Z-spread.
A privacy-focused cryptocurrency offering users the choice of shielded transactions to enhance confidentiality.
A cryptographic method allowing one party to prove the validity of information without revealing the information itself.