Glossary of Terms

An investment strategy involving ongoing buying and selling actions by the investor.

Measures the degree of active management by a portfolio manager represented as a percentage of the fund’s holdings that differ from the benchmark.

Alpha measures performance on a risk-adjusted basis by comparing it to the benchmark index.

Beta attempts to measure the 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.

The measurement of a fund’s cumulative return divided by its benchmark’s cumulative return during positive and negative market periods.

The calculation for distribution yields employs the most recent distribution, which may be interest, a special dividend, or a capital gain, and multiplies the payment by 12 to get an annualized total. The annualized total is then divided by the net asset value (NAV) to determine the distribution yield.

The portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company’s profitability.

A calculation of the average life of individual bonds within a bond fund, and serves as a useful measure of the entire portfolio’s sensitivity to rising and falling interest rates. An Effective Duration of 2.00 means that with a 1% decline in interest rates, the principal value should rise by 2%, and vice versa.

Funds from operations, or FFO, is considered by industry analysts as an appropriate measure of earnings performance for an equity REIT. Generally, FFO adjusts net income for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains/losses on sales of real estate, and extraordinary items. FFO is not a generally accepted account principle (GAAP), but has been defined by the National Association of Real Estate Investment Trusts (NAREIT) as a standard measure since 1991.

A median ratio used to compare the book value of fund’s stocks with their market value. The price to book ratio indicates how much an investor is paying for a company’s assets based on historical valuations. It does not reflect current market value.

A median ratio used to compare the price of a fund’s stocks with their per-share earnings. A higher price per earnings ratio indicates the market has belief that a company has the ability to increase its earnings.

A median ratio used to compare the price of fund’s stocks with their cash flow. The price to cash flow ratio indicates relative value. It does not reflect current market value.

An investment strategy that aims to maximize returns over the long run by keeping the amount of buying and selling to a minimum.

A measure of how frequently assets within a fund are bought and sold by the managers.

Common stock price.

A statistical measure that represents what amount of a fund’s movements can be explained by movements in its benchmark index. A high R-Squared (between 85 and 100) indicates the fund’s performance patterns have been in line with the index.

Real Estate Net Asset Value, or ReNAV, is a commonly used metric to estimate the adjusted book value of a Real Estate Investment Trust (REIT). NAV is the mark-to-market value of a company’s common equity calculated by applying an estimate of private market values to the company’s real estate and other assets and deducting all liabilities. NAV is often presented on a per-share basis.

An indicator of how profitable a company is relative to its total assets. Calculated by dividing a company’s annual earnings by its total assets.

The amount of net income returned as a percentage of shareholders equity.

SEC Yield is an annualization of the Fund’s total net investment income per share for the 30-day period ended on the last day of the month.

The measurement of a fund’s excess return. This helps determine if a fund’s returns are due to sound investment decisions or excess risk. The greater a fund’s Sharpe ratio, the better its risk-adjusted performance has been.

A statistical measurement showing how widely the returns varied over a certain period of time. When a fund has a high standard deviation, the predicted range of performance implies greater volatility.

A stock market index weighted by the market capitalization of each stock in the index. In such a weighting, larger companies account for a greater portion of the index. Most indexes are constructed in this manner, with the best example being the S&P 500.

A weighted harmonic average ratio used to compare the book value of fund’s stocks with their market value. The price to book ratio indicates how much an investor is paying for a company’s assets based on historical valuations. It does not reflect current market value.

A weighted harmonic average ratio used to compare the price of a fund’s stocks with their per share earnings. A higher price per earnings ratio indicates the market has belief that a company has the ability to increase its earnings.

Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures.