1
1-DAY YIELD
An annualized net yield for the day listed. It is calculated by multiplying the daily dividend factor by 36,500 and dividing by the NAV.
3
30-DAY DISTRIBUTION RATE
Calculated by taking the annualized accrued net income (income less expenses, also known as the declared dividend) of the last 30 days, and dividing by the period end NAV. The net income is annualized by taking the 30 days of declared dividends, dividing by 30, and multiplying by 365.
7
7-DAY CURRENT YIELD
The average income return over the previous seven days. It is the Fund's total income net of expenses, divided by the total number of outstanding shares. The yield may differ slightly from the actual distribution rate of a given portfolio because of the exclusion of distributed capital gains or losses which are non-recurring. The SEC Yield is a required yield to quote to clients. This yield does not allow for the inclusion of capital gains or losses.
7-DAY EFFECTIVE YIELD
The average income return over the previous seven days, assuming the rate stays the same for one year and that dividends are reinvested. It is the Fund's total income net of expenses, divided by the total number of outstanding shares. The yield may differ slightly from the actual distribution rate of a given portfolio because of the exclusion of distributed capital gains or losses which are non-recurring. This yield does not allow for the inclusion of capital gains or losses.
A
ALPHA
Measures the difference between a portfolio’s actual returns and its expected returns given its risk level as measured by its beta. A higher alpha is better, but a high alpha is only reliable in the presence of a high R-squared value. It can be viewed as a risk-adjusted measure of return. Some advisors see alpha as a measurement of the value added or subtracted by a fund’s manager. A positive alpha figure indicates the portfolio has performed better than its beta would predict. A negative alpha figure indicates a portfolio has underperformed, given the expectations established by the fund’s beta.
ALTERNATIVE INVESTMENTS
Broadly defined, an investment that is not one of the three traditional asset types (stocks, bonds and cash). Alternative investment strategies typically have the ability to use leverage, shorting, and active risk management in pursuit of returns that are lowly correlated with traditional asset types.
ANNUAL REPORT
An audited, SEC-required document that is sent to fund shareholders following the end of each fiscal year. It discloses the financial results for the year and provides information about certain aspects of a fund’s operations.
ASSET ALLOCATION
An investment strategy that seeks to balance risk and reward by dividing investments among different kinds of asset classes, such as stocks, bonds and cash.
ASSET CLASS
A group of securities that share similar characteristics and behave similarly in the marketplace. Asset classes are generally governed by the same rules and regulations.
ASSET-BACKED SECURITIES
A type of debt security that is based on pools of assets, or collateralized by the cash flows from a specified pool of underlying assets. Assets are pooled to make otherwise minor and uneconomical investments worthwhile, while also reducing risk by diversifying the underlying assets. An example of an asset-backed security is a mortgage-backed security, whose cash flows are backed by the principal and interest payments of a set of mortgage loans.
AVERAGE ANNUAL RETURNS WITH LOAD
A figure used to report the historical return of a mutual fund over a period of time. "With Load" indicates that this calculation includes sales charges/mutual fund fees associated with the purchase of shares.
AVERAGE ANNUAL RETURNS WITHOUT LOAD
A figure used to report the historical return of a mutual fund over a period of time. "Without Load" indicates that this calculation omits any sales charges/mutual fund fees associated with the purchase of shares.
AVERAGE MONTHLY YIELD
Represents a simple average of the one-day yield for all of the days within the month shown, net of management fees and expenses. These figures may contain capital gains and losses and therefore do not conform to the same formula as the 7-day yield calculations.
B
BATTING AVERAGE
The ratio between the number of quarters where the manager outperforms a benchmark and the total number of quarters. Focuses on shorter term (quarterly) performance.
BENCHMARK
The standard used as a point of reference for evaluating performance of a Fund.
BETA
Measures the historical market risk of a portfolio or the volatility of a portfolio relative to an underlying index over a defined historical period of time. If a portfolio has a beta of >1, it is more volatile than the benchmark. Conversely, if a portfolio has a beta <1, it is less volatile than the benchmark.
BONDS
A debt investment whereby investors loan money to entities (i.e. a corporation or government) to help them finance a variety of projects and activities. The entity borrows funds for a defined period of time at a particular interest rate. Types of bonds include corporate, municipal and U.S Treasury notes, bills and bonds, known as Treasuries.
BREAKPOINT
The investment levels required to obtain a reduced sales load. Some mutual funds that charge front-end sales loads will charge lower sales loads for larger investments.
C
CAPTURE RATIO
Up and down capture is a measure of how well a manager was able to participate in phases of positive benchmark returns, and how badly the manager was affected by phases of negative benchmark returns. A manager seeks to have a larger up-capture ratio and a smaller down-capture ratio.
CHARACTERISTICS
The measurement and statistics of securities held by each portfolio and its benchmark.
COLLATERALIZED MORTGAGE OBLIGATIONS (CMO)
A type of mortgage backed security. Investors in a CMO buy bonds issued by the entity, and receive payments according to a defined set of rules. The mortgages themselves are called the collateral, the bonds are called tranches (also called classes), and the set of rules that dictates how money received from the collateral will be distributed is called the structure.
COMMODITY INVESTMENTS
Investments in commodities provides investors with access to “real assets” such as oil, agriculture goods, and precious metals. The returns on commodity investments are generally tied to different economic factors and, therefore, can by less correlated to the returns of traditional stocks and bonds.
CORE AND SATELLITE
A portfolio construction strategy that separates an investment portfolio into two components to seek additional return opportunities. Investors achieve their desired exposure to equity and bond markets through Core investments — typically US large cap equities and fixed income put to work through passive, structured and/or actively-managed strategies. They then pursue alpha opportunities through less correlated Satellite strategies such as emerging markets, high yield and/or private equity investments.
CREDIT DEFAULT SWAPS (CDS)
A financial instrument designed to transfer the credit exposure of fixed income securities between parties. It is essentially an insurance contract that enables a seller to protect against the risk of default on debt obligations for a specific issuer.
CREDIT-ADJUSTED DURATION (YRS)
A bond's option adjusted duration, adjusted for the bond's spread and the impact this may have on the bond's sensitivity to changes in interest rates.
CUSIP
The Committee on Uniform Securities Identification Procedures (CUSIP) assigns a number identifying stocks, registered bonds and mutual funds. Brokers and dealers will use a security's CUSIP number to get further information about that security. The CUSIP number will also be listed on any trading confirmation tickets. The CUSIP system makes it easier to settle and clear trades
D
DERIVATIVE
A security whose price is dependent upon or derived from one or more underlying assets. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Futures contracts, forward contracts, options and swaps are the most common types of derivatives.
DISCOUNTED FREE CASH FLOW
Future cash flows multiplied by discount factors to obtain present value of a company.
DIVIDEND DISCOUNT MODEL
A formula to estimate the intrinsic value of a company by figuring the present value of all expected future dividends.
DIVIDEND FACTOR
The annual interest rate of a specific money market instrument divided by 365. When multiplied by the account balance of each client, will show the daily dividend accrued for each client.
DURATION
The weighted-average term-to-maturity of the bond’s cash flows, the weights being the present value of each cash flow as a percentage of the bond’s full prices. The greater the duration of a bond, the greater its price sensitivity. In general, duration rises with maturity, falls with the frequency of coupon payments, and falls as the yield rises (the higher yield reduces the present values of the cash flows). Duration also provides an indication of a bond portfolio’s price sensitivity to changes in interest rates.
E
EBITDA (EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION)
A measure of cash flow calculated by: Revenue minus Expenses (excluding tax, interest, depreciation and amortization). EBITDA looks at the cash flow of a company. By not including interest, taxes, depreciation and amortization, we can clearly see the amount of money a company brings in.
ENTERPRISE VALUE
The market capitalization of a company’s equity plus the market value of the company’s debt. Often, the value of assets that are non-core are excluded from the final calculation. Often referred to as a company’s total market capitalization.
EQUITY
An investment type focused on stocks or other securities representing an ownership interest in a company. Investors typically invest in equities or equity portfolios for dividend income and/or capital appreciation.
EXCHANGE-TRADED FUND (ETF)
An investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day.
EXPENSE RATIO - GROSS
The total of a mutual fund's annual fund operating expenses (assuming no expense reductions), expressed as a percentage of the fund's average net assets.
EXPENSE RATIO - NET
Represents a mutual fund's annual fund operating expenses (excluding fee waivers and reimbursem*nts), expressed as a percentage of the fund's average net assets.
F
FINANCIAL LEVERAGE
The use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt-to-debt plus equity. A company with high financial leverage is more dependent on debt rather than revenue to drive return on equity.
FIXED INCOME INVESTMENTS
An investment that provides regular (or fixed) returns in the form of periodic coupon payments and a return of principal upon maturity of the security. Investors typically invest in fixed income portfolios for regular streams of income, diversification from equity risk, and/or the potential for some capital appreciation.
FORWARDS
An agreement between two parties to buy or sell an asset at a specified point of time in the future. The price of the underlying instrument, in whatever form, is paid before control of the instrument changes.
FREE CASH FLOW
The amount of cash generated by the business after meeting all its obligations for interest, tax and dividends and after all capital investment, excluding share sales or purchases by the business.
FUNDAMENTAL EQUITY
A strategy employing fundamental analysis, whereby research using economic, financial, qualitative and quantitative factors is employed to select investments. Fundamental analysis seeks to take a holistic view of factors that may impact the value of a security (i.e. economic and sector conditions) and individually specific factors (i.e. company management).
FUTURES
A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price.
G
GROSS DOMESTIC PRODUCT (GDP)
The value of finished goods and services produced within a country’s borders over one year.
I
INCEPTION DATE
The commencement date of a Fund’s performance.
INFORMATION RATIO
A risk-adjusted measure of return which uses tracking error to represent risk. Specifically, it is the annualized excess return of the manager over the benchmark divided by the tracking error. A larger information ratio implies more return for less risk and measures the consistency with which a manager beats a benchmark.
INVESTMENT COMMENTARY
Commentaries designed to track recent market events and product performance. Usually provided on a monthly, quarterly or annual basis.
L
LEVERAGE
Using borrowed funds, or debt, in an effort to increase the returns to equity. The reversal of the leveraging process is known as deleveraging.
LIPPER TOTAL RETURN RANKINGS
Lipper Analytical Services, Inc. is an independent publisher of mutual fund rankings, records rankings for these and other Goldman Sachs Funds for one-year, three-year, five-year, and ten-year total returns. Lipper compares mutual funds within a universe of funds with similar investment objectives, including dividend reinvestment. Lipper rankings are based on total return at net asset value and do not reflect sales charges. Lipper rankings do not imply that the fund had a high total return.
LIQUIDITY
An asset’s ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value.
M
MARKET CAPITALIZATION
A measurement of the size of a business enterprise (corporation) equal to the share price times the number of shares outstanding of a public company – the total market value of the equity in a publicly traded entity.
MARKET EXPOSURE
A financial term which measures the proportion of money invested in the same industry sector. For example, a stock portfolio with a total worth of $500,000, with $100,000 in semiconductor industry stocks, would have a 20% exposure in "chip" stocks.
MAXIMUM SALES CHARGE
A percentage upfront charge imposed on the purchase of shares. The maximum sales load for mutual funds is restricted by FINRA to be no more than 8.5% of the amount invested.
MONEY MARKETS
Money market funds trade in short-term debt and monetary instruments. Money markets are viewed as lower risk (but not risk free) investments that historically have provided a better return to investors than cash.
MONTHLY PERFORMANCE
Performance metrics reflecting the immediate 30 day period of the Fund.
MORNINGSTAR RISK-ADJUSTED RATINGS
The Overall Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year (if applicable) Morningstar Rating Metrics. Morningstar, Inc. is an independent publisher of mutual fund research and ratings. Ratings reflect a fund’s risk-adjusted 3-, 5, and 10-year total returns, including any sales charge. A Fund is rated against all other funds in its category. 5 stars are assigned to the top 10%; 4 stars to the next 22.5%; 3 stars to the next 35%; 2 stars to the next 22.5%; and 1 star to the bottom 10%. Morningstar only rates funds with at least a 3-year history.
N
NAV $ CHANGE
The difference between today's closing net asset value (NAV) and the previous day closing net asset value (NAV)
NAV (NET ASSET VALUE)
The market value of one share of the Fund. This amount is derived by dividing the total value of all the securities in the fund’s portfolio, less any liabilities, by the number of fund shares outstanding.
NET DEBT FREE
When a company’s cash position exceeds the amount of debt it has that requires cash interest payments, that company is said to be “net debt free.”
NUMBER OF HOLDINGS
Composition of a fund’s portfolio at the specified period.
O
OPERATING LEVERAGE
Fixed operating costs divided by total (fixed plus variable) operating costs. A company with strong operating leverage has fixed costs which do not increase as more business is done. This generally means that increases in revenue will increase net income.
OPTION-ADJUSTED DURATION (YRS)
A measure of the sensitivity of a bond's price to interest-rate changes, assuming that the expected cash flows of the bond may change with interest rates.
OPTIONS
A privilege, sold by one party to another, that gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a certain period or on a specific date.
P
POPULISM
A political ideology in which there is a perceived belief in the control of the government by “the common man.”
PORTFOLIO SOLUTIONS
Professionally managed range of asset exposures designed to serve as either a total portfolio solution or a complement to existing exposures investors may own in their investment portfolios.
PRICE/BOOK P/B RATIO
Current price divided by the book value per share, which is the value of the assets on the corporation’s balance sheet.
PRICE/EARNINGS P/E RATIO
Price of a stock dividend by its earnings per share. The price to earnings ratio, also know as the multiple, gives investors an idea of how much they are paying for a company’s earning power.
PROSPECTUS
The traditional, long-form prospectus with which most mutual fund investors are familiar. The prospectus contains the important information included in the summary prospectus, and also includes more detailed information, including information relating to the fund’s investment adviser and portfolio managers and details on how to purchase and redeem shares.
Q
QUANTITATIVE EASING (QE)
Large-scale asset purchases by central banks, usually of long-maturity government debt but also of private assets, such as corporate debt or asset-backed securities. Typically, QE occurs in unconventional circ*mstances, when short-term nominal interest rates are very low, zero or even negative.
QUANTITATIVE EQUITY
A strategy employing quantitative analysis, whereby models such as risk and asset allocation are used to select portfolio holdings. This strategy seeks to deemphasize (in varying degrees in some cases) human judgment in security selection.
QUANTITATIVE TIGHTENING (QT)
Large-scale asset sales, shrinking the central bank’s balance sheet, and is the reverse of QE.
QUARTERLY DIVIDEND PER SHARE
An amount paid quarterly by the Fund to its shareholders which encompasses net income or gains earned by the Fund during the period.
QUARTERLY FACT CARD
A fact sheet that provides quarterly updates on Fund performance.
R
R SQUARED - 3 YEAR
R-squared of a manager vs. a benchmark is a correlation measure of how much a manager’s return can be explained by the benchmark. More specifically, R-squared is a measure of how well the variance of the benchmark explains the variance of the manager. Also known as “correlation-squared.”
REAL ESTATE/INFRASTRUCTURE
Investors can gain exposure to residential, commercial, and industrial properties and land through strategies investing in public traded securities such as Real Estate Investment Trusts (REITs) or privately issued securities. Similarly, investments in infrastructure-related strategies can provide access to the physical systems of a business or country, including transportation, electric, and telecommunication systems.
RECESSION
A significant decline in economic activity spread across the economy, lasting more than a few months.
RISK ASSETS
Assets that carry a degree of price volatility.
S
SAI
A supplementary document to a mutual fund’s prospectus that contains additional information about the fund, usually on its risks and operations. A mutual fund is required to provide a copy of its SAI (also known as “Part B” of its registration statement) free of charge upon request.
SELECT LIPPER RANKINGS
SELECT MORNINGSTAR RATINGS
SELECT ONE OR MORE ASSET CLASSES
SELECT ONE OR MORE SHARE CLASSES
SEMI ANNUAL REPORT
An audited, SEC-required document that is sent to fund shareholders twice a year. It discloses the financial results for the previous half year and provides information about certain aspects of a fund’s operations.
SHARE CLASS
A designation applied to mutual fund units indicating the way that sales charges, or loads, are levied.
SHARPE RATIO
A risk-adjusted measure of return which uses standard deviation to represent risk. Specifically, it is the annualized excess return of the manager over the 3 month Treasury (risk free rate of return) divided by the standard deviation of returns. A larger sharpe ratio implies more return for less risk.
SHORT SELLING
The practice of selling a financial instrument that the seller borrows first (does not own), and then purchasing it later to “cover the short." Short-sellers attempt to profit from an expected decline in the price of a security, such as a stock or a bond, in contrast to the ordinary investment practice, where an investor “goes long” by purchasing a security in the hope the price will rise.
SPREAD
The difference between two prices or interest rates.
SPREAD DURATION (YRS)
A measure of the sensitivity of a bond’s price to spread changes.
STANDARD DEVIATION
A measure of the dispersion of a set of data from its mean.
STANDARD DEVIATION- 3 YEAR
Measures the historical total risk of a portfolio by assessing the probable range within which a portfolio’s return could deviate from its average return over a defined historical period of time.
STANDARDIZED 30-DAY SUBSIDIZED AND UNSUBSIDIZED YIELDS (POP)
The calculation of the Standardized 30-Day Subsidized Yield is mandated by the SEC and is determinedby dividing the net investment income per share earned during the period by the maximum public offering price of the Fund (“POP”) per share on the last day of the period. This number is then annualized. The Standardized 30-Day Subsidized Yield reflects fee waivers and/or expense reimbursem*nts recorded by the Fund during the period. Without waivers and/or reimbursem*nts, yields would be reduced. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders. The Standardized 30-Day Unsubsidized Yield does not adjust for any fee waivers and/or expense reimbursem*nts in effect. If the Fund does not incur any fee waivers and/or expense reimbursem*nts during the period, the Standardized 30-Day Subsidized Yield and Standardized 30-Day Unsubsidized Yield will be identical.
STOCKS
An equity investment, or ownership securities, that represent ownership in a corporation.
SUMMARY PROSPECTUS
A fund document that provides investors with a brief, plain English, summary of the key information that will allow investors to make informed investment decisions. The summary prospectus must contain the following items in standardized order and cannot include additional information, nor omit required information: (1) investment objective; (2) fee and expense table; (3) principal investment strategies, principal risks and performance table; (4) management information; (5) purchase and sale information; (6) tax information; and (7) financial intermediary compensation information.
SWAPS
An agreement between two parties to exchange future cash flows according to a prearranged formula.
SYMBOL
A "short-hand" abbreviation established for each fund that is used universally when referring to the fund. These symbols can be found in the prospectus.
T
TOTAL FUND ASSETS
The market value of securities in a mutual fund portfolio.
TOTAL RETURNS AT NAV
Represents the change in value of an investment on the purchase of shares of the Fund over a specific period. It is the rate that an investor would have earned or lost on an investment in a Fund (assuming reinvestment of all distributions).
TRACKING ERROR
Measures the standard deviation of excess returns from a benchmark, and is used as a measure of risk. A large tracking error implies that there are large swings in the excess return series of a manager from their benchmark.
TREASURY INFLATION-PROTECTED SECURITIES (TIPS)
Treasury bonds whose value rises with inflation.
TURNOVER RATIO
The market value of the lesser of purchases or sales divided by the average asset value of the account over a given time period.
V
VOLATILITY
A measure of variation of a financial instrument's price.
W
WEIGHTED AVERAGE MARKET CAP
Represents the average value of the companies in the index or portfolio. The Weighted Median Market Cap provides the middle market capitalization level in the index or portfolio. Companies with a larger market capitalization have a greater impact on both calculations.
WEIGHTED AVERAGE MATURITY
The weighted-average time to the return of a dollar of principal. It is arrived at by multiplying each portion of principal received by the time at which it is received, and then summing and dividing by the total amount of principal. Thus, if a four-year bond with a face value of $100 and principal payments of $40 the first year, $30 the second year, $20 the third year, and $10 the fourth year, WAM = .4X1 yr + .3 X 2yr. +.2 X 3y r+.1 X 4yr. =2 yr.
WEIGHTED MEDIAN MARKET CAP
The midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio. Half the stocks in the portfolio will have higher market capitalizations, half will have lower.
Y
YIELD CURVE
A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates. The most frequently reported yield curve compares the three-month, two-year, five-year and 30-year U.S. Treasury debt. This yield curve is used as a benchmark for other debt in the market, such as mortgage rates or bank lending rates. The curve is also used to predict changes in economic output and growth.
YIELD TO MATURITY(YTM)
Yield to Maturity(YTM) is the interest rate that makes the present value of a bond's cash flows equal to the bond's price or initial investment. The YTM on derivatives, Treasury futures, and interest rate swaps incorporate the impact of current funding rates (due to a change in data source, funding rates on Treasury futures were not incorporated on the YTM calculation from approximately early 2020 through 9-Nov-2022. Since November 9, 2022, funding rates on Treasury futures have been incorporated ). On a portfolio level, the YTM is a characteristic of the portfolio based on its holdings as of a particular date and is considered a long-term bond yield expressed as an annualized rate of return, assuming the portfolio holds the assets until maturity and interest rates remain constant. The YTM does not represent the performance yield for a portfolio and may increase or decrease depending on the present value of a bond’s market price as well as the number and size of payments remaining. As of April 14, 2023, the YTM has been capped at 15% in order to provide a more prudent and conservative representation.
YIELD TO WORST(YTW)
Yield to Worst(YTW) is the interest rate that makes the present value of a bond's cash flows equal to the bond's price or initial investment, calculated by making worst-case scenario assumptions (excluding issuer default) on the bond by calculating the returns that would be received if provisions, including prepayment, call, put, and sinking fund, are used by the issuer. The YTW on derivatives, Treasury futures, and interest rate swaps incorporate the impact of current funding rates (due to a change in data source, funding rates on Treasury futures were not incorporated on the YTW calculation from approximately early 2020 through 9-Nov-2022. Since November 9, 2022, funding rates on Treasury futures have been incorporated). On a portfolio level, the YTW is a characteristic of the portfolio based on its holdings as of a particular date and is considered a long-term bond yield expressed as an annualized rate of return, assuming the portfolio securities are called with the lowest yield after running to each potential call date. The YTW does not represent the performance yield for a portfolio and may increase or decrease depending on the present value of a bond’s market price as well as the number and size of payments remaining. As of April 14, 2023, the YTW has been capped at 15% in order to provide a more prudent and conservative representation.
