Glossary

The most important terms from the world of funds - arranged alphabetically. Click one of the letters to display the relevant terms.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Basis Point (BP)

A basis point is 1/100 of a percentage point, i.e. 0.01%. The difference in yield between two bonds is usually given in basis points. (The difference between Bond A with 7.55% and Bond B with 7.83% is 28 basis points.)

Bear Market

Sustained fall in stock market prices. (Opposite: Bull Market)

Benchmark

A benchmark is a "yardstick" for the success of an investment fund. For example, for a fund that concentrates on "Austrian equities" the Vienna equity index "ATX 50" would be an appropriate benchmark.

Beta

Beta is a coefficient that provides the expected change in value of an investment when the market shifts by one per cent. Some examples: beta > 1 means that when the market rises (falls) by one unit the fund rises (falls) by more than one. If beta is between 0 and 1 this means that when the market rises (falls) by one unit the fund rises (falls) by less than one. If beta is positive the correlation between the fund and the market is also positive, i.e. the fund rises when the market rises. If beta is negative the correlation is also negative; so when the market rises the fund falls and vice versa.

Blue Chips

Term used to describe equities from large, first-class companies whose price is expected to develop positively and continually because of their corporate size and performance.

Bond Funds

Bond funds are securities funds that primarily or exclusively invest their assets in bonds. The return objective is based on regular earnings. The investment period is viewed as medium to long-term.

Bonds

(See: Bonds)

Bonds

English term for bonds

Bonds

Governments, the public sector and companies meet their financing requirements by issuing bonds. Bonds give the owner the right to interest and repayment of the capital deployed. Redemption usually occurs at set interest rates.