Financial dictionary

Annualized return is the average annual return on an investment over a specific period, adjusted to a yearly basis. It allows for the comparison of investment performance across different timeframes. Annualized return accounts for the compounding of returns over time, providing a more realistic view of an investment's long-term profitability.

An asset class is a category of financial instruments that share similar characteristics, market behavior, and risk profiles. The main asset classes include equities, bonds, real estate, commodities, and cash or cash equivalents. Each asset class responds differently to economic conditions and has distinct potential returns and risks. Diversification across different asset classes is an important component of an investment strategy, as it can help reduce the overall risk of a portfolio and increase its stability in various market conditions.

An asset deal is a transaction in which the buyer acquires specific assets of a company (e.g., real estate, equipment) instead of its shares. This approach allows the buyer to avoid taking on the company's liabilities and to acquire only the assets that are important to them. This type of transaction provides greater control over the acquired assets but may be less tax-advantageous for the seller.

Asset management is the professional management of investments such as stocks, bonds, real estate, and other securities, aiming to achieve the best possible returns for clients. Asset managers analyze financial markets, assess risks, and actively make decisions about buying or selling assets within a portfolio. Asset management services can be provided for a fee to individuals, institutions, and businesses.

An asset management company is a financial institution that manages investments on behalf of its clients. It pools funds from individuals or institutional investors and allocates them across various assets, such as stocks, bonds, real estate, or other securities. The goal is to optimize returns while adhering to investment objectives and considering clients' risk profiles. Asset management companies typically charge fees based on the amount of assets under management (AUM).

A total return of a fund since its inception is the percentage increase in the value of the investment in the fund from its establishment to the current date. This return takes into account all changes in the value of the fund, including any dividends, interest, and asset appreciation. It provides investors with an overview of the fund's long-term performance and helps them assess how effectively the fund has utilized invested capital over time.

Backtesting is the process of evaluating an investment strategy or model using historical data to determine how it would have performed in the past. It allows investors to assess the effectiveness and reliability of a strategy before applying it in real market conditions. While positive backtest results do not guarantee future success, they can help identify weaknesses and optimize investment approach.

Bank bonds are debt securities issued by banks to raise funds from investors. The bondholder lends money to the bank for a fixed period, and in return, receives regular interest payments (coupons). At maturity, the bank repays the bond's nominal value. These bonds can be secured by the bank's assets or issued as unsecured, and they are used to finance banking operations or to increase liquidity.

A bear market is a period when the prices of financial assets, particularly stocks, decline by 20% or more from their previous highs. This period can last from several months to years and is often accompanied by investor pessimism, economic issues, or a recession. During a bear market, investors typically seek safer investments or reduce their exposure to riskier assets.

A benchmark is a reference value against which the performance of an investment or portfolio is compared. It is usually an index that represents a specific market or sector, such as the S&P 500 for U.S. stocks. A benchmark helps investors assess whether their investments are performing better or worse than the market and can serve as a basis for making decisions regarding investment strategies.

Blockchain is a decentralized digital database that stores records of transactions in chronological order. Each block contains transaction details, a timestamp, and a link to the previous block, creating a secure and immutable chain. Blockchain technology is the foundation of cryptocurrencies like Bitcoin but is also used in other areas where transparency, security, and immutability of data are needed, such as financial services, supply chains, and healthcare.

Brick & mortar refers to traditional physical stores or businesses that have premises where customers can shop or use services in person. This term is used to distinguish them from online stores (e-commerce), which operate exclusively on the internet. Brick & mortar businesses often integrate digital channels to reach a broader audience and offer customers the option to shop according to their preferences.

A bull market is a period when the prices of financial assets, particularly stocks, rise by 20% or more from their previous lows. This growth is often accompanied by positive investor sentiment, optimism, and improving economic conditions. A bull market can last from several months to years and may be associated with a period of economic growth and low unemployment.

CAGR (Compound Annual Growth Rate) shows the average annual return on an investment over a specific period, assuming this return was evenly distributed across each year. It is a useful tool for comparing the performance of different investments or projects, as it takes into account the effect of compound interest. It helps both investment professionals and individuals understand how their investments have developed over time.

Cash flow is an indicator that tracks the movement of cash into and out of a company over a specific period. It reflects the company's ability to generate cash to cover expenses, repay debts, or make investments. It is divided into operating, investing, and financing cash flow, with each reflecting cash flows from specific areas of the company's activities.

Click & mortar refers to businesses that combine physical brick-and-mortar stores with online sales. This model allows customers to shop for products or services online, while also providing them the option to visit physical locations in person. Click & mortar businesses often use both channels to expand their reach, enhance customer experiences, and increase purchasing flexibility.

A closed-end investment fund is a fund that is created for a fixed period of time. The shareholder of such a fund does not have the right to request the redemption of their shares. Throughout its existence, the fund operates with a fixed number of shares. The purpose of the fund is to distribute dividends or pay out the appreciated invested amount after the fund's lifespan has ended.

Collateral refers to assets or property provided as a guarantee to secure a loan, credit, or other forms of financing. If the borrower fails to meet their obligations, the lender can use the collateral to cover any losses. Collateral can take various forms, including real estate, stocks, bonds, or other securities. The use of collateral helps mitigate the risk for the lender and can also influence loan conditions, such as interest rates.

Commercial real estate refers to properties intended for business purposes. These include office buildings, retail spaces, warehouses, and industrial buildings. Such properties generate income through rent or business operations and can be a key element of business strategies and investment portfolios. Commercial real estate differs from residential properties, which are intended for living purposes.

Common stock refers to a type of equity that represents ownership in a company and grants shareholders the right to participate in the company's profits (often through dividends) and to vote at shareholder meetings. Holders of common stock have the right to be involved in decisions about important matters concerning the company, such as electing board members or approving mergers and acquisitions. Common stock also has the potential to appreciate in value, which can lead to capital gains. However, in the event of liquidation, common stockholders have lower priority compared to preferred stockholders and creditors when it comes to the distribution of remaining assets.

Company valuation is the process of determining the economic value of a company or its assets. This process involves analyzing various factors such as financial statements, market conditions, future earnings, competition, and economic trends. The goal of valuation is to provide an accurate estimate of a company's value, which can be used in transactions such as mergers and acquisitions, company sales, obtaining financing, or internal planning. Valuation methods may include comparisons with similar companies, discounting future cash flows (DCF), or evaluating based on the company’s assets and liabilities.

A corporate bond is a security issued by a company to raise capital from investors. When purchasing a corporate bond, the investor is lending money to the company, which must be repaid within a specified period, with the company committing to regularly pay interest (coupons) throughout the duration of the bond. Corporate bonds can have various interest rates and maturities, and can be secured or unsecured, which affects their risk and return. Investors earn regular income from interest and may profit from a potential increase in the bond's value if its market price rises.

Credit risk is the risk that a borrower will not be able to meet their obligations to the lender on time or at all, which may lead to financial losses. This risk can arise from various types of loans and credit, such as corporate bonds, personal loans, or mortgages. Credit risk can be influenced by factors including the financial stability of the borrower, their ability to generate income, and external economic conditions. To mitigate credit risk, lenders often carefully assess the borrower's creditworthiness. As compensation for the increased risk, they may require collateral or higher interest rates.

A dividend is a portion of a company's profit that is distributed among its shareholders. Dividends are paid regularly, typically quarterly or annually, and can take the form of cash (cash dividend) or additional shares (stock dividend). A dividend is a way for companies to reward their shareholders for their investments and provide them with a steady income. The amount of the dividend can vary depending on the company's profitability and dividend policy.

An earn-out is an agreed-upon arrangement in a merger or acquisition where the seller receives additional payments from the buyer based on the future performance or results of the acquired company. These payments are often tied to achieving specific financial or operational goals over a set period following the completion of the transaction. The earn-out arrangement helps balance the risk between the seller and the buyer, and it also motivates the seller to continue successfully managing the business post-acquisition.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is a financial metric that measures a company's profit before accounting for interest, taxes, depreciation, and amortization. EBITDA provides an insight into a company's operational performance and its ability to generate profit from core business activities without the impact of non-operational costs and accounting practices. This metric is often used to compare the performance of different companies.

Equity is the ownership stake in a company, representing the value of the company’s assets after subtracting its liabilities. It is the amount owned by shareholders or owners and reflects the difference between the company’s total assets and its total liabilities. In the context of stocks, equity represents the value of a shareholder's ownership in the company. For individuals or households, equity can refer to the ownership value in real estate, i.e., the property value minus any mortgage or other liabilities.

An equity fund is a type of mutual fund that invests most of its assets in company stocks. The goal of an equity fund is to achieve investment growth through stock appreciation, either in the form of capital gains (increase in stock prices) or dividends (profit distributions by companies). This type of fund can be focused on specific industries, regions, or company sizes.

ESG (Environmental, Social, and Governance) criteria assess companies based on their environmental, social, and governance practices. Environmental factors relate to a company's impact on the environment, such as greenhouse gas emissions, resource usage, and waste management. Social factors focus on a company's relationships with employees, customers, and communities, including labor conditions, equality, and diversity support. Governance factors concern the way a company is managed, including ethics, transparency, risk management, and leadership. Investors and companies increasingly consider ESG criteria when making investment decisions, as these factors can impact a company's long-term sustainability and performance.

An ETF (Exchange-Traded Fund) is an investment fund that trades on a stock exchange, similar to stocks. ETFs typically contain various assets, such as stocks, bonds, or commodities, and allow investors to buy and sell shares during trading hours. This type of fund provides diversification, as it contains a portfolio of different investments, thereby spreading the risk. ETFs are also liquid, meaning their shares can be traded anytime during the trading day, and they usually have lower fees compared to actively managed funds. There is a wide range of ETFs covering different markets, sectors, and investment strategies.

A financial advisor is a professional who provides clients with advice on money management, investments, and financial planning to help them achieve their financial goals. They offer their services for a fee, often based on commission or assets under management.

Financial leverage is a strategy that uses borrowed capital (debt) to increase the potential return on an investment. It involves using loans or other forms of financing to increase the volume of investments that an investor can manage. This approach can significantly amplify profits if the investment generates a positive return. However, financial leverage can also increase the risk of loss, as it can lead to higher losses if the investment does not meet expectations. Therefore, it is important to carefully consider the potential benefits and risks before using financial leverage.

A financial market is a place where investors and issuers of financial instruments meet to trade various assets. This market facilitates the trading of stocks, bonds, commodities, currencies, and other financial products. Financial markets can be divided into capital markets, where stocks and bonds are traded, and money markets, where short-term securities and liquid assets are traded. The financial market plays a key role in the economy by enabling capital allocation, setting asset prices, and ensuring liquidity, which contributes to the efficient functioning of the economy.

A fund manager is a professional responsible for managing and overseeing an investment fund. Their role is to make decisions regarding the fund's investment strategy, select specific investments, and monitor their performance to achieve the fund's established investment goals. The fund manager analyzes markets, assesses risks, and constructs a portfolio that aligns with the fund's objectives and strategy. Their decisions directly influence the fund's performance and can have a direct impact on the investors' returns.

FX (foreign exchange) refers to the trading of currencies in the foreign exchange market. This market, also known as the forex market, is the largest and most liquid financial market in the world, where various currency pairs, such as EUR/USD, GBP/JPY, and others, are traded. The FX market allows participants, such as banks, businesses, investors, and individuals, to exchange one currency for another. It can be used for hedging against currency risks, speculating on exchange rate movements, or conducting international trade and investment transactions.

GLA (Gross Leasable Area) is a term used in the real estate sector to refer to the total area that can be leased in commercial properties, such as office buildings, retail spaces, or industrial facilities. GLA includes all areas that can be rented, including office spaces, retail spaces, and other usable areas, but it does not include common or technical spaces such as hallways, elevators, or restrooms. This metric is important when evaluating and comparing commercial properties, as it provides information about the potential rental income.

Hedge funds are investment funds that use various strategies, such as short selling, leverage, and arbitrage, to maximize returns and minimize risk. They invest in a wide range of assets and are typically aimed at qualified investors. These funds may be less regulated and more flexible than traditional investment funds.

An index fund is a type of investment fund that aims to replicate the performance of a specific stock market index, such as the S&P 500 or DAX. This fund invests in the stocks or bonds that make up the index, and its goal is to achieve similar returns to the index it tracks. Index funds typically have low management fees and are popular for their simple, passive investment strategy.

The information ratio is a financial metric that measures an investment manager's ability to achieve above-average returns relative to a benchmark, while accounting for the volatility of those excess returns. It is calculated as the ratio of the fund's excess return (the difference between the fund's return and the benchmark return) to its tracking error (the volatility of that excess return). A higher information ratio indicates that the fund achieves higher above-average returns with lower risk compared to the benchmark.

An institutional investor is a large organization that invests capital on behalf of its clients or members. These organizations include banks, investment funds, pension funds, insurance companies, and university endowments. Institutional investors often have substantial financial resources and expertise, which allows them access to a broader range of investment opportunities and strategies, as well as better trading conditions. Their investment decisions can have a significant impact on financial markets.

Interest rate risk is the risk that changes in interest rates will affect the value of an investment or the cost of financing. This risk primarily impacts bonds and other fixed-income instruments, where the value of the investment decreases as interest rates rise and increases when interest rates fall. Interest rate risk can also affect the cost of loans and mortgages, where higher interest rates may raise the cost of debt repayment. Effective management of interest rate risk involves using various financial instruments and strategies (such as derivatives) to hedge against adverse movements in interest rates.

Investing in cryptocurrencies involves purchasing digital assets such as Bitcoin, Ether, or other altcoins with the goal of making a profit. This type of investing is volatile and risky, as cryptocurrency prices can fluctuate significantly. Investors can buy cryptocurrencies through crypto exchanges, hold them in digital wallets, or use various investment products such as ETFs or funds focused on cryptocurrencies. This market is relatively new and continuously evolving, making it an attractive yet less stable investment opportunity.

Investment banking is a sector of banking that focuses on providing professional financial services to companies, governments, and institutions. Investment banking services include advising on mergers and acquisitions, assisting with securities issuance, risk management, and securities trading. Investment banks also help with business restructuring and provide strategic advisory services. Their goal is to help clients optimize their capital structure, secure financing, and achieve strategic objectives.

An investment certificate is a financial instrument that provides investors with access to the performance of various assets, such as stocks, bonds, commodities, or indices, without directly owning those assets. Investment certificates are often issued by banks or other financial institutions and can come in various forms, including certificates with fixed returns, guaranteed minimum returns, or variable returns depending on the performance of the underlying assets. These certificates allow for investment diversification and can offer different levels of risk and return depending on the specifics of the certificate.

Investment horizon is the period during which an investor plans to hold an investment before selling it. This horizon can be short-term (a few months), medium-term (a few years), or long-term (ten years or more). The length of the investment horizon affects the investment strategy, asset selection, and risk tolerance. Longer investment horizons often allow for greater flexibility and tolerance to volatility, while shorter horizons may require more conservative investments and less risky assets.

Investment stocks are shares of companies that are considered attractive for investment due to their growth and profit potential. These stocks are often selected based on analytical criteria such as strong financial performance, innovation, growth potential, or positive future prospects. Investment stocks can provide capital gains (appreciation in stock price) and possibly dividends. They allow investors to share in the success of the company and benefit from its growth.

An investor is an individual or organization that invests their financial resources in various assets with the goal of achieving profit or financial returns. Investors can invest in stocks, bonds, real estate, commodities, and other financial instruments. Their decisions are often based on an analysis of potential returns and risks, as well as their investment objectives and time horizon. Investors can be individuals, institutions such as pension funds and investment banks, or businesses that use their capital resources to generate profits and expand their portfolios.

IPO (Initial Public Offering) is the process through which a company first offers its shares to the public for trading on a stock exchange. The purpose of an IPO is to raise capital for business growth, debt repayment, or other corporate needs. After the IPO, the company's shares begin trading on public markets and are available to a broad range of investors. This move can increase the company's visibility and prestige, but it also comes with additional regulatory obligations and public scrutiny.

A joint venture is a business agreement between two or more independent companies that come together for the purpose of carrying out a specific project or business activity. Each company contributes capital, expertise, or technology and shares the profits, losses, and risks arising from the joint operation. A joint venture allows partners to pool their resources and skills, gaining access to new markets, technologies, or products that might otherwise be difficult to reach on their own. A joint venture can take various forms, from a separate legal entity to a temporary project-based collaboration.

KII (Key Investor Information) are key documents designed to provide investors with an overview of an investment product, including its risks, returns, and costs. This document aims to help investors better understand the terms and characteristics of an investment before deciding to invest. KII typically includes information about the investment strategy, historical performance, fees, and the risks associated with the investment. It is an important tool for ensuring transparency and informed investment decisions.

LTV (loan-to-value) is a financial ratio that measures the proportion between the loan amount and the value of the collateralized asset, typically real estate. LTV is often used in mortgages or other types of loans to assess the risk and stability of the loan. It is calculated as the ratio of the loan amount to the property value, expressed as a percentage. For example, if the loan amount is €80,000 and the property value is €100,000, the LTV is 80 percent. A lower LTV means less risk for the lender, as the debt represents a smaller proportion of the property's value. Conversely, a higher LTV may indicate greater risk and often leads to higher interest rates or stricter terms.

M&A (mergers and acquisitions) refers to mergers and acquisitions, which are processes in which two or more companies merge (merger) or one company acquires another (acquisition). The goal is growth, increased efficiency, or gaining new technologies or access to new markets.

A management fee is a fee charged by investment or management companies for managing an investment fund or portfolio. This fee covers the costs of managing and overseeing investments, including analysis, asset selection, and performance monitoring. It is typically charged as a percentage of the assets under management, either annually or quarterly.

MBO (management buyout) is a process in which the current managers of a company acquire a controlling stake or buy out the company they work for. This process allows the managers to take ownership and control of the company, often with the goal of streamlining operations, increasing value, or maintaining strategic independence. MBOs are often financed through a combination of the managers' own equity and external funding, such as bank loans or venture capital investments.

A mutual fund is an investment fund that gathers funds from various investors and invests them in a diversified portfolio of assets such as stocks, bonds, commodities, or other investment instruments. Investors are issued shares of the fund, which represent their share of the total assets of the fund. Mutual funds are managed by professional managers who decide on the investment strategy and selection of assets. There are different types of mutual funds, including open-end and closed-end funds, which differ in terms of trading methods and liquidity. Mutual funds provide investors with the opportunity to achieve diversification and professional management of their investments.

NAV (Net Asset Value) is the value of a fund's or company's assets after deducting liabilities. In the case of investment funds, NAV represents the total value of all the fund's investments, including stocks, bonds, and other assets, minus all the fund's debts and obligations. NAV is typically calculated at the end of each trading day and shared with investors as a reference point for the value of their investments. For mutual funds, NAV is often used to determine the price of a fund share.

NOI (Net Operating Income) is a metric that measures the net operating income of a property or investment portfolio before accounting for interest, taxes, depreciation, and amortization. It is calculated as the difference between the total income generated by the property (e.g., rent) and the operating expenses (e.g., maintenance, management). NOI provides an overview of the profitability and efficiency of operating the property and is an important indicator when evaluating its investment performance.

Ongoing fees are costs that are regularly charged for the management and maintenance of an investment fund or portfolio. These fees may include management fees, advisory fees, administration costs, and other services related to investment activities. Ongoing fees are typically expressed as a percentage of the value of the assets under management and may be charged on an annual or monthly basis. These fees affect the net return on investment, and it is important to take them into account when evaluating the costs and benefits of investing.

An open-end mutual fund is a type of investment fund that allows investors to buy and sell shares essentially at any time. This type of fund does not limit the number of shares that can be issued, and its price is regularly updated based on the fund's asset value, usually at the end of the trading day. Open-end mutual funds provide investors with flexibility, liquidity, and access to a diversified portfolio of various investments. They are managed by professional fund managers who are responsible for the investment strategy and asset selection.

The P/B (price-to-book ratio) is a financial metric that compares a company's market price per share with its book value per share. This ratio is calculated by dividing the market price of a single share by the book value of one share (the company's equity divided by the number of outstanding shares). The P/B ratio is used to assess whether a stock is undervalued or overvalued relative to the company's book value. A lower P/B may indicate that the stock is undervalued or that the company is facing issues, while a higher P/B could suggest overvaluation or expectations of higher growth.

Performance of a fund refers to the ability of an investment fund to generate returns in comparison to its objectives and benchmarks. It is typically measured as the percentage growth of the fund's value over a specific period, including the consideration of dividends and interest. A fund's performance can be evaluated over various time horizons, such as monthly, quarterly, or annually. It is important to compare the fund's performance to a reference index or benchmark to determine how well the fund is meeting its investment goals and how effectively it is utilizing its capital. To obtain a complete picture of the fund's efficiency, performance evaluation may also consider the risks the fund is taking.

Prime yield is an indicator that measures the return on commercial real estate in prime locations with high-quality tenants. It represents the return an investor can expect from investing in a property in a top location, typically retail or office spaces, which are considered the least risky. Prime yield is often used as a benchmark for comparing the performance of different properties and can be influenced by market conditions, demand, and supply in the commercial real estate market.

Private equity is a form of investing that focuses on investments in private companies that are not listed on the stock exchange. Private equity investors provide capital for the development, restructuring, or expansion of companies, often with the goal of increasing their value and subsequently achieving a profit through a sale or IPO (initial public offering). Investments within private equity can include buying entire companies (buyouts), investing in start-up business projects (venture capital), or other forms of equity investments. This type of investing can offer high returns but often comes with higher risk and a longer investment horizon.

A property manager is a professional responsible for the management and operation of real estate properties, such as commercial or residential buildings. Their role is to ensure the efficient and smooth functioning of the property, including maintenance, tenant management, problem-solving, and ensuring compliance with legal regulations. The property manager handles lease agreements, collects rent, ensures maintenance and repairs are carried out, and often oversees the marketing and leasing of the property. They play a key role in ensuring tenant satisfaction and optimizing returns from the property.

A prospectus is a document that provides detailed information about an investment product, such as stocks, bonds, or investment funds, to inform potential investors and assist them in making decisions. It includes data on the investment strategy, risks, costs, historical performance, and other key aspects of the product. The prospectus is important for ensuring transparency and providing complete and accurate information so that investors can make informed decisions.

A publicly traded company is a company whose shares are listed on a public exchange and traded on the open market. These companies must comply with strict regulatory requirements regarding transparency, governance, and regular financial reporting. Public trading allows the company to raise capital from a broad range of investors, providing liquidity, meaning shares can be easily bought and sold on the exchange. Public trading also increases the company's visibility and enhances its prestige. However, it also comes with greater demands for information disclosure and stringent oversight mechanisms.

A qualified investor is an individual or institution that meets specific financial or professional criteria, allowing them to invest in riskier or specialized investment products such as hedge funds, private equity, and certain real estate funds. These criteria typically include the size of the investor's assets, income, and investment experience.

A qualified investor fund is an investment fund designed for investors who meet certain criteria and have sufficient financial resources and experience to handle a higher level of investment risk. These funds are often less regulated than regular investment funds, allowing for greater flexibility in terms of investment strategies and opportunities. Qualified investor funds can invest in a variety of assets, including riskier or less liquid investments. These funds are typically managed by professionals and may offer higher potential returns, but also come with higher risks.

A Real Estate Fund is an investment fund that focuses on investments in real estate and related assets. These funds can invest in various types of properties, such as office buildings, commercial spaces, residential complexes, or industrial properties. Real estate funds allow investors to gain exposure to the real estate market without the need for direct ownership or property management. These funds can generate income from rental payments as well as from the appreciation of property values. They can be open or closed-ended, with open-ended funds allowing for regular buying and selling of shares, while closed-ended funds have a limited number of shares and do not allow regular buying or selling.

A reference currency is a currency used as a basis for measuring the value or performance of other currencies or financial instruments. In international trade and finance, it is often used as a standard for comparison and conversion of values. For example, in many financial transactions and calculations, such as exchange rates or price indexes, the US dollar, euro, or another stable currency may be used as the reference currency. The reference currency provides a foundation for determining relative value and facilitates international trade and investment.

A retail investor is an individual investor who invests their personal financial resources in various investment instruments, such as stocks, bonds, funds, or real estate. Retail investors are often less experienced compared to institutional investors, such as banks or investment funds, and their investment decisions are typically less complex. Retail investors generally invest through brokers or online investment platforms and may have various investment goals and strategies.

Robo-advisory is a service that provides automated investment advice using algorithms and software platforms. These services utilize technology to analyze financial data and create personalized investment plans without the need for a human advisor. Robo-advisory platforms typically offer low fees, easy access, and automated portfolio rebalancing. This makes them an attractive option for individuals seeking a time- and cost-effective investment solution.

ROC (return on capital) is a metric that evaluates the profitability of an investment in relation to the capital used. It expresses the profit generated by a company or investment from each euro of invested capital. ROC is used to measure how efficiently a company or project utilizes its capital to generate profit. A high ROC indicates that the company is using its capital effectively, while a low ROC may signal the need for improvements in management and resource allocation.

A share is a unit of ownership in an investment fund or company. In the case of investment funds, it represents a portion of the total assets of a fund that belongs to an investor. The value of a share fluctuates depending on the fund's performance and the value of its assets. In the case of company stocks, it represents an ownership stake in the company, giving the shareholder the right to participate in its profits (such as through dividends) and vote at annual general meetings.

A share deal is a transaction in which the buyer acquires shares or equity interests in the target company, thereby gaining ownership of its assets and liabilities. In a share deal, the transaction does not involve trading individual assets but rather the company itself, meaning all its rights, obligations, contracts, and liabilities are transferred to the new owner. This type of transaction is common in mergers and acquisitions and can be attractive to buyers who wish to maintain existing business relationships and operations of the company.

A SPAC (Special Purpose Acquisition Company) is a company created solely for the purpose of raising capital through an initial public offering (IPO) with the intention of later merging with or acquiring an existing private company. A SPAC does not have its own business operations or products; it serves solely as a vehicle for raising funds and bringing a target company public. SPACs are often referred to as "blank check" companies because their only asset is the capital raised from investors. For target companies, merging with a SPAC can be a faster and simpler way to become publicly traded.

The Synthetic Risk and Reward Indicator (SRRI) is a standardized tool used to assess the risk profile of an investment fund. This indicator evaluates the risk and potential return of an investment on a scale from 1 to 7, where 1 represents the lowest risk with lower potential returns, and 7 represents the highest risk with potentially higher returns. SRRI helps investors more easily compare different funds and better understand the risks associated with an investment. It is a mandatory part of the Key Investor Information Document (KIID) for all UCITS funds.

The total expense ratio (TER) is an indicator that expresses the total costs associated with the management and operation of an investment fund, as a percentage of its average annual assets. It includes management fees, administrative costs, distribution fees, and other operating expenses. TER helps investors understand how much they will pay for holding a share in the fund and affects the net return on the investment. A lower TER indicates a more efficient fund, while a higher TER may reduce the overall return for the investor.

Thematic investing is an investment strategy that focuses on specific themes or trends, such as technological innovations, sustainability, demographic changes, healthcare, or renewable energy. This strategy involves investing in companies and sectors that align with the chosen theme or trend and have the potential to benefit from its long-term growth and development. Thematic investments allow investors to express their belief in the future development of a particular market or sector and are suitable for those seeking targeted opportunities outside of traditional diversified portfolios.

The risk/reward ratio evaluates the balance between the expected return and the risk of an investment. It indicates the level of risk that needs to be taken in order to achieve certain returns. Using this ratio, investors compare investment opportunities and select those that best align with their goals and risk tolerance.

UCITS (Undertakings for Collective Investment in Transferable Securities) is a regulatory framework of the European Union for investment funds, which allows them to be sold across the EU based on a unified set of rules. UCITS funds are designed to provide a high level of investor protection, including requirements for diversification, liquidity, and transparency. Due to this regulation, UCITS funds are popular among investors. They offer relative safety, are strictly regulated, and are easily accessible on international markets.

Underwriting is the process in which an investor or investment firm agrees to purchase newly issued securities, such as stocks or bonds, during their initial public offering (IPO) or other forms of issuance. Underwriting involves a commitment to provide capital to the issuer in exchange for securities. In the case of a public securities offering, underwriting is often carried out by investment banks or financial intermediaries, who then offer the securities to the public or institutional investors. The underwriting process allows the issuer to raise the necessary capital for their business or investment plans.

Valuation multiple is a financial indicator used to assess the value of a company or its shares based on certain economic parameters. This multiple is calculated as the ratio between the value of the company (or its shares) and a selected financial metric, such as earnings, revenue, or equity. For example, the P/E ratio (price-to-earnings ratio) compares the market price of a share with its earnings per share, while the P/B ratio (price-to-book ratio) compares the market price of a share with its book value. Valuation multiples help investors assess whether a company is overvalued or undervalued in relation to its financial performance and market standards.

Venture capital (VC) is a form of financing where investors provide capital to early-stage companies or innovative projects with high growth potential. It is a risky investment because these companies are often in the early stages of development. However, in case of success, they promise high returns. Venture capital funds typically acquire an equity stake in the company and participate in its management and strategy.

Volatility is a measure of the fluctuation in the price or returns of an investment asset over time. High volatility means that the price of the asset can change significantly in a short period, indicating a high level of risk and uncertainty. In contrast, low volatility means that the price of the asset moves relatively steadily. Volatility is often measured using the standard deviation or variance of the asset's historical returns. In the investment world, volatility is an important factor in assessing risk and can influence investment decisions and portfolio management.

WAULT (weighted average unexpired lease term) is an indicator that represents the average time remaining until the expiration of lease agreements in a property portfolio. This metric is calculated as a weighted average of the lease durations, based on the rent and the area of individual properties. WAULT provides insights into the stability of rental income and the long-term security of an investment in commercial real estate. A higher WAULT indicates a longer period for which tenants are bound by lease agreements, which can contribute to greater stability and predictability of income.

A wealth manager is a financial professional who provides comprehensive wealth management services to affluent individuals or families. They focus on investment planning, asset protection, retirement security, tax optimization, and estate planning. The goal is to achieve long-term growth and protection of the client's wealth.

The weight of a fund in the context of an investment portfolio refers to the percentage share of a specific fund in the total value of the portfolio. This indicator determines what portion of the investment funds or capital is allocated to a particular fund. The fund's weight influences the overall risk and performance of the portfolio, as funds with higher weight have a greater impact on the overall performance and volatility of the portfolio. Properly setting the weight of the funds is crucial for achieving investment goals and managing risks.

Yield is a financial indicator that measures the return on an investment as a percentage. It can apply to various types of investments, such as stocks, bonds, or real estate. Yield is calculated as the annual return on an investment (such as interest or dividends) divided by its current price or value. For example, the dividend yield for stocks is calculated as the annual dividend per share divided by the current stock price. Yield gives investors an idea of the return they can expect from an investment and is an important factor when comparing different investment opportunities.

YTD (year-to-date) is an indicator that measures the performance of an investment, financial asset, or portfolio from the beginning of the current calendar year up to the current date. YTD provides an overview of how the investment has developed throughout the year, regardless of seasonal or short-term fluctuations. This indicator is useful for tracking and comparing the performance of investments and budget plans throughout the year.

YTM (yield to maturity) is an indicator that expresses the total return an investor will receive from a bond if held until maturity. YTM takes into account all future interest payments (coupons) that the bond pays, as well as its current price and face value. This indicator is expressed as an annual percentage yield. YTM helps investors understand what the actual return will be from the bond if held until maturity and is useful for comparing different bonds with varying terms and coupon amounts.