Glossary of Terms
| Beta | Beta attempts to measure relative risk. A Beta rating above 1.0 indicates greater volatility than the market. A Beta rating below 1.0 indicates lower volatility than the market. |
| Standard Deviation | A statistical measurement showing how widely returns varied over a certain period of time. For the characteristics, the period is twelve months. For the chart the period is since inception. When a fund has a high standard deviation, the predicted range of performance implies greater volatility. |
| Market Capitalization | The measurement of the total dollar market value of all of a company’s outstanding shares. |
| Price/Earnings | An equity valuation measure defined as market price per share divided by annual earnings per share. |
| Price/Cash Flow | A measure of the market’s expectations of a firm’s future financial health. Because this measure deals with cash flows, the effects of depreciation and other non-cash factors are removed. |
| Price/Book | A ratio used to compare a stock market value to its book value. It is calculated by dividing the current closing price by the latest quarter’s book value per share. |
| Price/Sales | A valuation metric for equities. It is calculated by dividing the company’s market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by the per-share revenue. |
| Enterprise Value/Sales | A valuation metric for equities. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company's balance sheet. This is then divided by the revenue in the most recent year. |
| Return on Equity | The amount of net income returned as a percentage of shareholders‘ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Return on Equity = Net Income/Shareholders’ Equity |
| Return/Risk | A measure of risk adjusted performance that is often compared to a benchmark. The formula is the annualized return divided by the annualized standard deviation. |
| Tracking Error | The annualized standard deviation of the excess returns of a strategy and its benchmark. It is a measure of how closely a strategy is performing relative to its benchmark. |
| R-Squared | A statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model. It can also by computed by squaring the correlation between the strategy and the benchmark. |
| Alpha | A risk-adjusted performance measure that represents the average return on a portfolio or investment, above or below that predicted by the capital asset pricing model (CAPM), given the portfolio's or investment's beta and the average market return. |
| MSCI All-Country World Index (ACWI)® | A free-float weighted equity index. It captures Large and Mid-Capitalization representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. It is not possible to invest directly in an index. |
| Russell 2000® Index | Consists of the smallest 2,000 companies in a group of 3,000 U.S. companies in the Russell 3000® Index, as ranked by market capitalization. It is not possible to invest directly in an index. |
| S&P 500 | Widely regarded as the best single gauge of large cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. It is not possible to invest directly in an index. |