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R-Squared (R2)
R-squared measures the correlation of a fund’s movement in comparison to its corresponding benchmark. An R squared score of 1.00 would indicate a perfect correlation, whereas a score of 0.00 indicates no correlation. (Source: ETF Guide) -
Real Estate Investment Trusts
REITs are publicly traded companies that pool investors’ capital to invest in a variety of real estate ventures, such as apartment and office buildings, shopping centers, medical facilities, industrial buildings, and hotels. After an REIT has raised its investment capital, it trades on a stock market just as a closed-end mutual fund does.There are three types of REITs: Equity REITs buy properties that produce income. Mortgage REITs invest in... -
REIT ETF
Exchange-traded funds that invest the majority of assets in equity REIT securities and related derivatives. REIT ETFs are passively managed around an index of publicly traded real estate owners; indexes may vary from provider to provider but two popular benchmarks are the MSCI U.S. REIT Index and the Dow Jones U.S. REIT Index, both of which cover about two-thirds of the aggregate value of the publicly-traded REIT market domestically.... -
Risk Adjusted Returns
A concept that refines an investment’s return by measuring how much risk is involved in producing that return, which is generally expressed as a number or rating. Risk-adjusted returns are applied to individual securities and investment funds and portfolios. There are five principal risk measures: alpha, beta, r-squared, standard deviation and the Sharpe ratio. Each risk measure is unique in how it measures risk. When comparing two or more... -
Sector
An industry or market sharing common characteristics. Investors use sectors to place stocks and other investments into categories like technology, health care, energy, utilities and telecommunications. Each sector has unique characteristics and a different risk profile. Dividing an economy into different like-pieces allows for more in-depth analysis of the economy as a whole. Any economy can be divided into sectors, such as the economy of a particular city, or... -
Securities
Traditionally, a security was a physical document, such as stock or bond certificate, that represented your investment in that stock or bond. But with the advent of electronic record-keeping, paper certificates have increasingly been replaced by electronic documentation. In current general usage, the term security refers to the stock, bond, or other investment product itself rather than to evidence of ownership. (Source: Yahoo! Finance) -
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is an independent federal agency that oversees and regulates the securities industry in the United States and enforces securities laws. The SEC requires registration of all securities that meet the criteria it sets, and of all individuals and firms who sell those securities. It’s also a rule making body, with a mandate to turn the law into rules that the investment industry can... -
Senior Bank Loans
A debt financing obligation issued by a bank or similar financial institution to a company or individual that holds legal claim to the borrower’s assets above all other debt obligations. The loan is considered senior to all other claims against the borrower, which means that in the event of a bankruptcy the senior bank loan is the first to be repaid, before all other interested parties receive repayment. Senior...
