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Asset Backed Security

A financial security backed by a loan, lease or receivables against assets other than real estate and mortgage-backed securities. For investors, asset-backed securities are an alternative to investing in corporate debt. An ABS is essentially the same thing as a mortgage-backed security, except that the securities backing it are assets such as loans, leases, credit card debt, a company’s receivables, royalties and so on, and not mortgage-based securities. (Source:...

Authorized Participant (AP)

An entity chosen by an exchange-traded fund’s (ETF) sponsor to undertake the responsibility of obtaining the underlying assets needed to create an ETF. Authorized participants are typically large institutional organizations, such as market makers or specialists. The authorized participant plays a critical role in the construction of an ETF’s creation unit (large blocks of the ETF’s underlying shares of equity or other assets). After acquiring all the underlying stocks...

AWMA® (see Accredited Wealth Management: Advisor)

Bachelor’s Degree

Barclays Capital Aggregate Bond Index

The Barclays Capital U.S. Aggregate Bond Index is to fixed income investors what the Dow Jones Industrial Average (DJIA) or S&P 500 is for stock traders. It is the most commonly used benchmark for determining the relative performance of bond or fixed income portfolios. It is also a major indicator for the overall health of the fixed income investing market. (Source: InvestingAnswers, Inc.)

Benchmark

An investment benchmark is a standard against which the performance of an individual security or group of securities is measured. For example, the average annual performance of a class of securities over time is a benchmark against which current performance of members of that class and the class itself is measured. When the benchmark is an index tracking a specific segment of the market, the changing value of the...

Beta

Beta is a measure of an investment’s relative volatility. The higher the beta, the more sharply the value of the investment can be expected to fluctuate in relation to a market index. For example, Standard & Poor’s 500-stock Index (S&P 500) has a beta coefficient (or base) of 1. That means if the S&P 500 moves 2% in either direction, a stock with a beta of 1 would also...

Bond ETF

A type of exchange-traded fund (ETF) that exclusively invests in bonds. Bond ETFs are very much like bond mutual funds in that they hold a portfolio of bonds and can differ widely in strategies, ranging from U.S. Treasuries to high yields, from long-term to short-term. Bond ETFs trade like stocks and are passively managed. A bond ETF trades throughout the day and is therefore more liquid than a mutual...

Buyback

The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake. A buyback allows companies to invest in themselves. By reducing the number of shares outstanding on the market,...

CAIA® (see Charted Alternative Investment Analyst)