Morningstar Glossary

Accumulation
A term indicating that a fund does not give dividends. The opposite is an income fund.
Accumulative return
Performance figures that cover a rolling period, whether annually, monthly, weekly, or daily. For example, on 14 March 2001, the 1-year trailing return would cover the period from 14 March 2000 through 14 March 2001 and the 1-week trailing return would cover the period from 7 March to 14 March 2001.
Active management
When a fund manager uses his own judgement to decide what shares to buy or sell rather than following an index. The opposite is known as passive management or index tracking.
Additional
The smallest amount permitted to top up an existing fund investment.
Administrator
The overseer of the policies and operations of a fund management company.
Alpha
The amount by which a fund has out-performed its benchmark, taking into account the fund´s exposure to market risk (as measured by Beta). Alpha is also known as the residual return.
Alternative Investment Market (AIM)
A stockmarket launched in June 1995 in London for smaller growing companies which would not normally qualify for listing on the main market.
American Depository Receipts (ADRs)
Negotiable certificates held in an American bank representing title to a certain number of foreign shares. Non-American companies wishing to list on the US exchange must offer ADRs.
American Stock Exchange (AMEX)
The second largest floor-based exchange in America. AMEX focuses on the shares of small to medium-sized companies and has a strong presence in common shares, index shares and equity derivative securities.
Amount
Enter the currency amount invested in the fund. The Portfolio Tool will then find the price and number of shares automatically.
Amsterdam Exchange (AEX)
The Amsterdam Exchange is the exchange that comprises the AEX-Effectenbeurs, the AEX-Optiebeurs (formerly the European Options Exchange or EOE) and the AEX-Agrarische Termijnmarkt. AEX is part of Euronext, which is the combination of the exchanges of Amsterdam, Brussels and Paris.
Annual General Meeting (AGM)
An annual forum for a company where shareholders can exercise their voting rights.
Annual management charge
For annual management charge, please see Management Charge.
Annual report
A legally-required document filed each year by each fund that includes a description of how the fund has invested its assets. It provides investors with an overview of the fund with financial details such as a company and consolidated balance sheets, a statement of total return, an auditor´s report and includes information on the managers, the directors and the chairman of the fund. The chairman´s statement reflects the past year and the report should also mention any upcoming issues and meetings relating to the fund.
Annual return
Comparison of the performance of the fund, its category and the category index over calendar year periods.
Annual returns %
The performance of a fund over calendar year periods.
Annualised return
Refers to the conversion of the return on an investment into a yearly rate. For example, if Fund A returned 5% over six months and Fund B returned 4% over four months, Fund A´s annualised return is 10,25% and Fund B´s is 12,49%.
Asia 4Tigers
Proportion of portfolio invested in Hong Kong, Singapore, South Korea and Taiwan. This term is gradually going out of use as China becomes more important as a market.
Asset allocation
Deciding how to spread an investment between categories of financial assets (including shares, bonds, cash) and tangible assets (including real estate, commodities, precious metals and collectibles). Asset allocation is generally driven by the desire to optimise the risk-return trade-off according to an investor’s time frame and investment objectives.
Asset Allocation
By selecting this box, the user can take more active control of the asset allocation targets, by entering the chosen weights in the relevant fields. The users should note that a minimum cash allocation of 2% is always recommended because investment funds themselves always hold some cash.
Asset classes
Broad investment categories that offer differing levels of risk and return, such as shares, bonds, property and cash. Shares tend to provide the best potential for capital growth but with relatively high levels of risk. Bonds offer income with a moderate degree of risk. Property offers capital growth but with the potential for illiquidity. Cash presents the lowest level of expected return but ensures liquidity and the safety of the original investment.
Asset management
A general term for management of a portfolio of a pre-determined group of asset classes, such as shares, bonds or cash.
Assets in Top 10 Holdings
The percentage of the fund´s portfolio which is invested in its biggest ten holdings.
Australasia
Proportion of portfolio invested in Australia and New Zealand.
Austrian WKN
Austrian WertpapierKennNummer. An Austrian system for numbering financial instruments.
Authorised
An authorised investment business is one that adheres to the Financial Services Act which states that all investment businesses operating in Britain are required to be a member of one of the regulatory bodies established under the Act.
AUTIF
The old name for the Investment Management Association (IMA), the trade body which represents the management groups which run open ended investment companies and unit trusts.
Average
This Average row shows the average of the different data points of the funds that have met search criteria. The data points include management fees, all the return figures [that is one day, one year, three years etc] where applicable, Morningstar ratings, Style Box details, and standard deviation.
Top