Useful Terminologies of Asset Management Industry

  • Escalation – a rapid increase
  • Recapitalization – it is a process of restructuring a company’s debt and equity mixture
  • Fiscal deficit – Government’s spending exceeds its income
  • TER – Total expense ratio

  • Multi-channel sales – sales from more than one sales channel, i.e. sales from the company’s own website, online marketplaces, mobile marketplaces, etc
  • Gamut – range
  • MIBOR – Mumbai Inter-Bank Offer Rate

  • LEAP – Learn Evolve Achieve Progress – Classroom-based learning interventions covering technical skills, functional skills, life skills and experiential learning modules providing by AMCs
  • T30 cities – Top 30 cities of India
  • B30 cities – Cities beyond T30 cities
  • QAAUM – Quarterly Average Asset Under Management
  • MAAUM – monthly average AUM
  • H1FY – First half of fiscal year
  • Risk appetite – Risk appetite is the level of risk that an organization is prepared to accept in pursuit of its objectives
  • Sharpe ratio – Ratio that show average return earned in excess of risk free rate of total risk
  • Beta – Beta is a measure of the market – investment’s volatility
  • Modified duration – it is the price sensitivity and the percentage change in price for a unit change in yield
  • Trustee – legal custodian who looks after all the monies invested in a mutual fund
  • Record date – the record date is the cut-off date established by a company to determine which shareholders are eligible to receive a dividend payment
  • Ex-Dividend date –if you purchase a stock on or after its ex-dividend date, you will not receive the next dividend payment (it is a date after which a security is traded without a previously declared dividend)
  • Trigger facility – a trigger is a specific event (pre-specified price, date index level, etc), on the occurrence of which the funds from one scheme will be automatically redeemed and/or switched to another scheme as specifies by the investor
  • Jensen’s Alpha – the excess or abnormal returns earned by the mutual fund portfolio compared to its benchmark
  • 12b-1 Fee – A 12b-1 fee is an annual marketing or distribution fee on a mutual fund. The 12b-1 fee is considered to be an operational expense and, as such, is included in a fund’s expense ratio, the fee covers marketing and paying brokers who sell shares. They also go toward advertising the fund and mailing fund literature and prospectuses to clients
  • Upfront commission – The upfront commission is a one-time payment that an AMC pays a distributor on selling a mutual fund scheme to an investor
  • Trail commission – Trail commission is a recurring fee paid to a distributor until the investment is withdrawn
  • Bespoke strategy – Wealth manager do provide bespoke, that is tailored service provided by them to their client
  • Dividend Frequency – This is the number of times in a year that dividend is distributed to the shareholders/unitholders
  • Divergence – The price of an asset is moving in the opposite direction of the technical indicator or moving contrary to other data.
  • ASBA – ASBA means “Applications Supported by Blocked Amount”. ASBA is an application containing an authorization to block the application money in the bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money shall be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn/failed.
  • Proxy – A shareholder vote on matters that require shareholders’ approval.
  • Blue-chip – A Blue chip fund is a term used to indicate well-established and financially sound companies. 
  • Asset-backed Securities – When a bond is backed by any type of collateral assets. so, that type of assets is called Asset-backed Securities
  • Anchor investor – A qualified institutional buyer who makes an application for a value of ten crore rupees or more in a public issue made through the book-building process.
  • Allottee – Successful Bidder to whom allotment is made
  • Emerging market – Emerging markets are economies of countries that are in the progress of becoming a developed country and typically are moving toward mixed or free markets
  • Active Risk – Active risk is the difference between a portfolio’s returns and the benchmark or index it was meant to mimic or beat.
  • Currency hedging – Currency hedging is designed to reduce the impact of exchange rate fluctuations on investments that are traded in another currency.
  • Dividend yield – The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
  • Tracking Error – Tracking error is a measure of financial performance that determines the difference between the return fluctuations of an investment portfolio and the return fluctuations of a chosen benchmark. The return fluctuations are primarily measured by standard deviations.
  • Active asset – An active asset is an asset that is used by a business in its daily or routine business operations.
  • Trailing Returns – Trailing returns are the returns that measure the performance of a mutual fund for the past specific periods, such as 1 yr, 3 yr, 5 yr, or inception-to-date basis.
  • Rolling returns – Rolling returns are the average annualized returns taken for a specified period on every day/week/month and taken till the last day of the duration.  It measures the fund’s absolute and relative performance over some time at regular intervals.
  • Run rate – Run rate is a method of forecasting upcoming earnings over long period of time based on past earning data.
  • MTM (mark to market) – MTM refers to the fair value of the asset or any securities that gets change over time and records the asset or securities as its current market price

Published by Aakash and Meet

I am Aakash Raotole I am currently doing Bcom from Dr. Patel and Rb Patel commerce college I am currently studying at finnacle investment academy Recently done distance internship with windrose capital, Pune - for a period of 14 weeks I am Meet Bhatt Completed HSC in commerce Now studying finbridge program at finnacle investment academy and Bcom externals I had completed CFA institute's investment foundation course and distance internship with Windrose capital, Pune - for a period of 14 weeks

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