S&P (Standard and Poors)
Standard & Poors is one of the world's foremost providers of independent credit ratings, indices, risk evaluation, investment research, data, and valuations.
S&P 500 Composite Index
An index of 500 widely held common stocks that measures the general performance of the US market.
The S&P/TSX is the largest and most widely followed common stock index in Canada. Formerly called the TSX and prior to that the TSE.
S&P/TSX Composite Index
An index of widely held Canadian common stocks that measure the general performance of the Canadian market.
S&P/TSX Total Return Index
The value of the S&P/TSX Composite Index with dividends re-invested over time.
The Sharpe Ratio is a measure of risk-adjusted performance. It measures the excess return earned per unit of risk taken. Annualized Sharpe Ratio converts the monthly ratio to an annual figure.
The percentage of a fund's assets that are invested in short positions. For example, a manager may be 60% long and 100% short, resulting in a market exposure of 40% net short.
The act of borrowing stock to sell high today with the expectation of buying it back at a lower price in the future and then returning the stock to the lender. An investor pays a stock lender a small fee to borrow the shares (usually arranged by a brokerage firm).
A situation in which a lack of supply and an excess demand for a traded stock forces the price upward causing losses for short sellers. Short squeezes occur more often in thinly traded small cap stocks and losses from short squeezes are accentuated when a number of short sellers attempt to cover a short position simultaneously.
Fund that invests assets in a single strategy and one or more managers.
Stocks with a market capitalization of less than $250 million in Canada.
The Sortino ratio is a measure of return per unit of risk. Whereas the Sharpe ratio focuses on all volatility ("good" or "bad"), the Sortino ratio uses the downside standard deviation to highlight only the “bad volatility”.
Particular circumstances involving a security that would compel investors to trade the security based on the special situation, rather than the underlying fundamentals of the security or some other investment rationale. An investment made due to a special situation is typically an attempt to profit from a change in valuation as a result of the special situation, and is generally not a long-term investment.
See Short Squeeze
A measure of the dispersion of a set of (return) data from its mean. The more spread apart the data is, the higher the deviation. Standard deviation is applied to the annual rate of return of an investment to measure the investment’s volatility (risk). Annualized standard deviation converts the monthly deviation to an annual figure.
This strategy profits from temporary pricing discrepancies between related securities. This irregularity offers an opportunity to go long the cheaper security and to short the more expensive one. As the prices of the two related securities revert to their norm, or mean, gains will be realized.
A unique series of letters assigned to a security for trading purposes. Stock symbols are also known as ticker symbols.
Stop-loss measures are designed to limit trading losses by automatically selling a position when a certain price is reached.
The investment approach a manager takes to reach the fund's objectives. For example, Global Macro is a strategy within the opportunistic style of funds. Strategy and style are often used interchangeably.
A simulation technique used on asset and liability portfolios to determine their reactions to different financial situations.
A term used to describe engineered products offering exposure to a variety of investment strategies in an investor-friendly package such as closed-end funds, and guaranteed principal repayment notes.
Hedge funds can be categorized into three main styles: Relative Value, Event-Driven and Opportunistic. Each of these styles has a few to several different strategies. Style and strategy are often used interchangeably.
The tendency of a manager to deviate from or alter the fund’s investment style or strategy over time.
The tendency for poor performing funds to drop out while strong performers continue to exist. This results in an overestimation of past results.