Alpha:

An indicator of the portfolio's risk-adjusted excess return over the benchmark index. A positive value indicates that the asset manager has typically succeeded in the past in achieving a portfolio composition that has resulted in a higher return than the benchmark, taking into account the portfolio beta.

Auditor:

Audits the annual accounts of the fund and checks its records.

Balance:

Analysis of the assets, liabilities and equity of the company. The balance sheet helps to understand the financial stability and liquidity of the company.

Beta:

It shows how much the portfolio moves on average for a unit shift in the market. A value greater than 1 means that the portfolio is on average more volatile than the market benchmark, i.e. the portfolio has a higher average risk level than the market. A value less than 1 indicates a risk profile lower than the reference index.

Bond:

A bond is a debt security with a maturity date. Its issuer undertakes to pay the amount of money specified in the bond, together with predetermined interest, to the bondholder at a specified time and in a specified manner.

Bond funds:

Bond funds form a separate group, whose portfolios contain government and corporate bonds and interest-bearing instruments.

Book Value (BV):

Assets minus liabilities.

Bottom-up approach:

An equity analysis strategy that focuses on the analysis of individual companies, regardless of the impact of the industry or macro environment.

Callable bond:

Allows the issuer to redeem the bond at any time at a predetermined price and date.

Capital protected fund:

The face value of units is redeemed at the end of the term or at any time after a predetermined period.

Capital protection:

Protection of invested capital at the end of the term. The design of capital protected funds ensures that the investor gets at least the capital back if he keeps the investment until maturity.

Cash flow statement:

An analysis of the company's cash flow. It is important to examine the cash flows from the company's operating, investing and financing activities because it shows whether the company is able to operate, invest and repay its liabilities in a sustainable manner.

Closed-ended fund:

We can only join closed-end funds during the subscription period prior to the fund's launch. These funds are generally established for a fixed term, i.e. they have a specific maturity date until which we must keep our savings in the fund. Of course, if we need the invested amount during the term, we can sell closed-end funds through a stock exchange order, but in this case, the value of our investment will be determined by the current demand, not its intrinsic value. Therefore, if we have chosen a closed-end fund, it is advisable to keep our investment until maturity.

Commodity fund:

Commodity funds provide investors with access to the world of commodity exchanges and commodity market instruments.

Convertible Bond:

Allows the holder to exchange the bonds for a specified number of shares on a specified date.

Corporate bond:

A bond issued by a company. These bonds are considered higher risk as the financial stability of companies can be variable and the solvency of companies can be affected by market conditions and the company's own business performance.

Coupon coupon bond:

Pays interest at specified intervals.

Creditor:

A party that lends money or assets to another and expects repayment with interest. In investment fund management, the fund becomes a creditor when purchasing bonds.

Custodian:

The bank responsible for the safekeeping of the fund's assets, the technical execution of securities transactions and the determination of the net asset value, which also controls the activities of the fund manager.

Debt securities:

Debt securities are characterised by the fact that they are repaid by the issuer of the security at a specified time, together with interest as specified in the terms and conditions of the security. The best-known types are bonds, treasury bills and mortgage bonds.

Debtor:

A party that borrows money or assets and is obligated to repay it with interest. In investment fund management, the issuer of a bond is the debtor, while the fund acts as the creditor.

Derivative fund:

The assets of a fund are invested in derivative instruments, such as futures, options or leveraged instruments.

Discount price:

The price below par at which a unit may be purchased during the subscription period.

Discounted Cash Flow (DCF) Analysis:

A method of company valuation that uses a discount rate to convert future cash flows into present value, thereby determining the current value of an investment or company.

Distributor:

The party responsible for selling units and providing information to investors.

Diversification:

A method of reducing risk whereby an investor invests in a variety of assets, industries, geographical regions, so that a single market event has less impact on the overall portfolio.

Dividend:

A portion of profit paid to shareholders.

Dividend Discount Model:

A method of stock valuation based on the principle that the value of a share is equal to the sum of the present value of all future expected dividends.

Duration:

Average remaining maturity.

Earnings Per Share (EPS):

Net income per share.

Equity:

Equity security without maturity, usually issued by public limited companies to raise funds.

Equity funds:

The portfolio of equity funds consists of shares issued by companies.

Equity securities:

Participation (membership) certificates are a proof that the holder has contributed to the share capital of a company and is entitled to a proportionate share of the profits distributed, i.e. dividends, on the money invested. The basic type is shares, but also includes units.

ETF (Exchange Traded Fund):

An exchange-traded index-tracking investment fund that tracks stock market price movements.

Exchange rate risk:

The risk arising from the uncertainty of the future development of the market exchange rate.

Financial institutional bond:

Banks and other financial institutions also issue bonds.

Financial market:

The market for the sale and purchase of short-term financial instruments (usually less than 1 year).

Fixed rate bond:

The interest rate is fixed for the duration of the term.

Foreign exchange risk:

The risk that changes in exchange rates will negatively impact the value of an investment. This is especially relevant for funds investing in foreign assets.

Fund Manager:

The company responsible for the establishment, investment decisions and administration of the fund, which may not directly control the assets of the fund.

Fund of funds:

An investment fund that builds its portfolio from units of other funds.

Fundamental Analysis:

An investment analysis method based on a detailed examination of a company's financial performance and economic situation.

Government bond:

A bond issued by a government. Government bonds are generally lower risk because a country's government can usually rely on its own solvency and fiscal resources.

Income statement:

Analysis of revenues, expenses, profit and loss. It shows how efficiently the company is operating and what results it is achieving.

Inflation:

Inflation is the sustained increase in the general price level of goods and services, reducing the purchasing power of money. In investment fund management, inflation affects real returns, prompting fund managers to consider inflation-linked or real assets.

Information quotient:

A measure of the equilibrium of over-performance, the ratio of the alpha to the tracking error. The excess yield achieved is compared to the deviation from the reference index.

Interest:

The cost of borrowing money, paid by the borrower to the lender. For funds, interest is a potential source of return.

Interest rate risk:

The risk that changes in market interest rates will reduce the value of fixed-income securities. Fund managers mitigate this through portfolio composition.

Investment fund:

A form of savings in which many investors invest their money together, sharing the risks and costs, and the fund manager manages these assets according to a predefined investment policy.

Investment policy:

A set of rules setting out the objective, principles and investment mix guidelines of the fund, as set out in the Prospectus and Management Regulations.

Investment ticket:

A security representing an interest in an investment fund. The investor becomes the owner of the fund and shares in its performance.

Investor:

A person who participates in the fund by buying units and thus has access to the jointly managed portfolio.

ISIN:

The ISIN (International Securities Identification Number) is a 12-character code used globally to uniquely identify securities. It facilitates accurate tracking of financial transactions and ensures clear identification of financial instruments.

Issuer:

The legal entity that undertakes to make a payment.

Issuer risk:

The risk that the issuer of a security will default on its obligations, i.e. if it is unable or unwilling to meet its obligations or fails to meet them to their full value.

Leverage:

A strategy in which the fund takes on exposure greater than its own assets, so that both the return and the loss can be multiplied.

Liquid asset:

An asset that can be sold quickly and with little loss in value, such as a bank deposit or short-term government bond.

Long position:

An investment strategy that expects the price of an asset to rise - the asset is bought.

Long-term bond:

Maturity longer than 10 years.

Market Capitalization:

The company’s value based on share price and quantity.

Maturity:

The period over which an investment -such as a bond or money market instrument - remains active until it matures or expires. Fund managers consider maturity when managing portfolio risk and liquidity.

Maximum drawdown:

The maximum fall in the fund’s price over a given period.

Medium-term bond:

3-10 years maturity.

Mixed funds:

Mixed securities funds combine bonds and equities in their portfolios.

Money market funds:

Within securities funds, the simplest product group is money market funds, which invest in various money market instruments, i.e. bank deposits, short-term government securities and bonds.

Municipal bond:

A bond issued by a municipality.

Net asset value:

The combined value of the different series of investment units.

Nominal interest:

The interest rate used to determine the coupon.

Nominal value:

The original value printed on a security (e.g., a bond), used to calculate interest payments. It may differ from the market price.

Open-ended fund:

You can join open-ended funds on any trading day and withdraw your savings at any time. These funds are generally set up for an indefinite term, and you can decide for yourself how long you want to keep your savings in them. Of course, it is always advisable to follow the investment time frames recommended by the fund manager to ensure that your investment has a good chance of delivering the expected performance.

Option transaction:

A derivative contract that gives the right to buy or sell an asset at a specified price at a future date.

Portfolio Manager:

The professional within the fund manager who buys securities with investors' money and manages the fund's portfolio.

Price:

Net asset value per unit.

Price-to-Book Ratio (P/B):

Share price divided by book value per share.

Price-to-Earnings Ratio (P/E):

Share price divided by earnings per share.

Private fund:

An investment fund in which the number of investors is limited.

Public fund:

An investment fund that is open to all, with no restrictions on the number of investors.

Quantitative approach:

Screens stocks based on a database of metrics, e.g. ROE, EPS, PEG.

Rate:

The current market price of a security or currency. Changes in exchange rates affect the performance of investment funds.

Recommended investment horizon:

The time horizon over which the fund can provide the expected yield while smoothing out short-term fluctuations in prices.

Redeemable bond:

Allows the holder to redeem the bonds held at a predetermined date(s). In such cases, the Issuer is obliged to repay the Bondholder the Nominal Value or the value specified in the Final Terms.

Reference index (benchmark):

A market indicator used as a benchmark against which the fund’s performance over a given period is measured.

Return on Assets (ROA):

Net income divided by total assets.

Return on Equity (ROE):

Net income divided by equity.

Risk rating (SRI):

A scale from 1 to 7 that reflects the risk level of an investment fund, based on market volatility and the potential for capital loss. Its purpose is to help investors compare different products more easily.

Settlement:

The number of days for the financial settlement of investment unit transactions.

Sharpe:

It indicates how much risk was taken to achieve an excess return over the risk-free return.

Short position:

An investment strategy that expects the price of an asset to fall - the asset is sold and then bought back later.

Short-term bond:

Term of 1-3 years.

Spread:

The root mean square deviation of weekly returns from the arithmetic mean. With higher spread, the portfolio is characterised by larger exchange rate swings, which means a higher risk level.

Stock Exchange:

An organised market where financial instruments are traded in a regulated environment.

Stock market index:

Shows the average price change of shares traded on a stock exchange, a measure of market performance.

Subscription period:

The period during which units in a closed-end or capital protected fund can be purchased, usually lasting a few weeks.

Supervision:

Authorises the establishment of the fund and monitors the operation of the fund manager and the depositary on an ongoing basis.

Technical analysis:

Based on price movements, trends and patterns, ignoring company fundamentals.

Top-down approach:

An equity analysis strategy that starts with macroeconomic, industry and regional levels of analysis and then selects companies.

Total return fund:

Total return funds, which are not tied to a specific asset class but can freely move their assets between them depending on market events; and invest in securities not only directly but also through derivative instruments.

Tracking error:

It shows how much the fund’s return has deviated from the benchmark index over a given period.

Type of fund:

It indicates the asset class in which the fund invests (e.g. equity, bond, real estate, etc.).

Variable rate bond:

The rate of interest varies over time. The interest rate is most commonly referred to as the interest rate linked to an interbank rate as a reference rate.

Yield:

The return generated from an investment, including interest, dividends, or capital gains. Fund managers aim to maximize yield while managing risk.

YTD (Year to date) yield:

The performance of the fund in the calendar year up to the reporting period.

Zero coupon bond:

It pays no interest, the profit is the difference between the purchase price below par and the par value paid at maturity.