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Disclaimer

Terms and Conditions for the Retail Informational Website for Singapore

You must read these Terms and Conditions for your own protection and benefit. When you have read these Terms and Conditions and provided you are entitled to view this website and all web pages thereunder owned and/or operated by Goldman Sachs Asset Management (Singapore) Pte. Ltd.(Company Number: 201329851H) (“GSAMS”) and presently located at https://assetmanagement.gs.com/content/gsam/sgp/en/individual/homepage.html (collectively this “Website”) according to these Terms and Conditions and any applicable laws and regulations, please click on the button below to acknowledge that you have read, understood and accepted the Terms and Conditions and to proceed to the main part of this Website. It is your responsibility to observe all applicable laws and regulations of any relevant jurisdiction.

This Website, the content, information, applications, programmes, text, materials, images, sounds, graphics, videos, software, functions, documents and other materials displayed or made available on this Website and the attachments transmitted through this Website (collectively the “Contents”), are displayed, made available or transmitted by GSSP/GSAMS on behalf of the Funds (defined below) and intended exclusively for individual residents in Singapore (the “Purpose”). The Contents are not intended to be accessed by any person in any jurisdiction for which the access or use is illegal. By proceeding, you represent and warrant that you are a Singapore resident. Unless explicitly specified, none of the sub-funds of the Goldman Sachs Funds SICAV (the “Funds”) should be understood to be approved for sale or purchase by any relevant authority outside Singapore.

GSSP/GSAMS reserves the right to update or modify, including suspending or discontinuing the provision of, adding to or removing from (as the case may be), the Terms and Conditions of this Website, and the Contents, for any reason, and any such changes, if made, are effective immediately. Your continued access to and use of the Contents after such changes are made shall be construed as agreement to the Terms and Conditions so modified. Goldman Sachs International (“GSI”), GSSP/GSAMS and/or any other company or person controlled by, controlling or under common control with GSI (together the “Firm”) has not verified the Contents and does not warrant or represent that such Contents are accurate, current, or complete and they should not be relied upon as such, without regard to the date on which you may access the information.

You hereby agree that in the event of non compliance with these Terms and Conditions you will indemnify and hold the Firm and the Funds harmless against any liabilities (including all costs of investigation and defence) and other damages arising from any breach by you or by any of your delegates of these Terms and Conditions and the Firm may be entitled to specific performance and injunctive or other equitable relief as a remedy in addition to and not in lieu of any appropriate relief in the way of monetary damages.

Certain sections, pages or documents in this Website contain separate or additional disclosures or terms and conditions, which will apply in addition to these Terms and Conditions. In the event of any inconsistency, the separate or additional disclosures or terms and conditions will take precedence. In particular, important information on the Funds is contained in the offering documentation for Singapore investors on this Website, including but not limited to the Singapore prospectus and the product highlights sheets. Before purchasing or acquiring any shares in any Funds, it is your responsibility to read the Funds’ Singapore prospectus, product highlights sheets and offering materials which are available and may be obtained from this Website. You may wish to seek advice from a financial adviser before making a commitment to purchase any shares in any Funds. In the event you choose not to seek advice from a financial adviser, you should consider whether the product in question is suitable for you.

CONTENTS NOT TO BE CONSTRUED AS A SOLICITATION, A RECOMMENDATION OR ADVICE

The Contents do not constitute an invitation to invest or a public offer of the Funds in the U.S., Singapore or elsewhere. The Contents are provided for informational purposes only, without regard to the investment objectives, financial situation, or means of any particular person or entity, and do not constitute a recommendation or a representation about the suitability or appropriateness of the Funds; or an offer to buy or sell; or the solicitation of an offer to buy or sell any Fund, security, financial product, or instrument; or to participate in any particular trading strategy. Certain transactions, including those involving futures, options, and high-yield securities, give rise to substantial risk and are not suitable for all investors. Many of the products described on this Website involve significant risks. Transactions should not be entered without a full understanding of all such risks and an appropriate independent determination that such transactions are appropriate. Any discussion of the risks contained in this Website with respect to the Funds should not be considered to be a disclosure of all risks or complete discussion of the risks which are mentioned. For complete information always refer to the Funds’ latest offering documentation, including but not limited to the relevant prospectus as well as any supplement to such prospectus. You should not construe any of the Contents as business, financial, investment, hedging, trading, legal, regulatory, tax, or accounting advice. The Firm will not treat users of this Website as its clients by virtue of such users accessing any of the Contents.

REPRESENTATIONS

Non U.S. Person Representation

The Contents are not available to U.S. persons or persons acting on their behalf, and Funds described in the Contents are not being offered in the United States or to U.S. persons. Therefore, you represent, warrant and covenant to the Firm that: (i) you are not acting for the account or benefit of a U.S. Person (as defined in Rule 902 of Regulation S under the U.S. Securities Act of 1933, as amended); (ii) you are not acting for the account or benefit of a person who is not a Non-United States Person (as defined in Rule 4.7 under the U.S. Commodity Exchange Act, as amended); (iii) you will not make the Contents available to any such U.S. Person or any person who is not such a Non-United States Person; and (iv) you will forthwith cease any use of the Contents for any purpose if any of the foregoing representations is no longer true.

DISCLAIMER OF WARRANTIES

Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express, implied or statutory, is made regarding future performance. Opinions and/or estimates reflect a judgment at the original date of publication by the Firm and are subject to change without notice. No reliance may be placed for any purpose on the information, opinions and/or estimates provided on this Website or the accuracy or completeness thereof and no responsibility can be accepted by the Firm to anyone for any action taken on the basis of such information, opinions and/or estimates. The price, value of and income from any of the securities or financial instruments mentioned in this Website can fall as well as rise. Foreign currency denominated securities and financial instruments are subject to fluctuations in exchange rates that may have a positive or adverse effect on the value, price or income of such securities or financial instruments. Investors in securities, the values of which are influenced by currency volatility, effectively assume this risk. Valuations provided in this Website may be based upon a number of factors including, but not limited to, current prices quoted, valuation of underlying assets and market liquidity, as well as other assumptions (which are subject to change without notice) and publicly available information. All assumptions and estimates provided in this Website should not be relied upon for any investment decision. The Firm does not represent that any transaction can or could have been effected at such valuations. Any valuations are provided as a courtesy and are intended solely for your analysis.

The Firm may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this Website. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them and the Firm is under no obligation to ensure that such reports are brought to your attention. The Firm makes no representation or warranty whatsoever to you, express, implied or statutory, regarding the security of this Website or any information transmitted by or to you through this Website and you accept the risk that any information transmitted or received through this Website may be accessed by unauthorized third parties. Transmissions over the Internet may be subject to interruption, black-outs, delays and other errors.

BY ACCESSING THIS WEBSITE, YOU EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE CONTENTS ARE PROVIDED BY GSSP/GSAMS ON AN "AS IS" BASIS, AND USED AT YOUR SOLE RISK. THE FIRM MAKES NO REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, CONCERNING THIS WEBSITE. UNLESS OTHERWISE PROHIBITED BY APPLICABLE LAW AND/OR REGULATION, THE FIRM HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, REGARDING THIS WEBSITE AND ANY RESULTS TO BE OBTAINED FROM THE ACCESS TO OR USE OF THIS WEBSITE, INCLUDING BUT NOT LIMITED TO ALL REPRESENTATIONS AND WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY RIGHTS, TITLE, MERCHANTABILITY, SATISFACTORY QUALITY AND FITNESS FOR A PARTICULAR PURPOSE OR USE AND ALL REPRESENTATIONS AND WARRANTIES ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING AND/OR USAGE OF TRADE OR THEIR EQUIVALENTS UNDER THE APPLICABLE LAWS AND/OR REGULATIONS OF ANY JURISDICTION. THE FIRM DOES NOT REPRESENT, WARRANT OR GUARANTEE THE ACCURACY, ADEQUACY, TIMELINESS, SUITABILITY, CORRECTNESS, QUALITY, COMMERCIAL VALUE, RELIABILITY, COMPLETENESS OR AVAILABILITY OF THIS WEBSITE OR THE INFORMATION OR RESULTS OBTAINED FROM USE OF THIS WEBSITE, OR THAT THIS WEBSITE OR ITS CONTENTS OR RESULTS WILL BE FREE FROM ERROR, DEFECTS OR OTHER FAULTS OR FROM MALICIOUS, SURREPTITOUS, DESTRUCTIVE OR CORRUPTING CODE, AGENT, MACRO OR OTHER PROGRAM.
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INTELLECTUAL PROPERTY

All intellectual property rights related to the Contents, including the information, text, materials, images, logos, photographs and illustrations on this Website and regarding the lay-out and design thereof (such intellectual property rights referred as the “Intellectual Property”) are the property of the Firm or have been licensed to the Firm by the owner(s) of those rights or are used as permitted by applicable law. None of the Contents, nor any copy of it, may be altered in any way (including, for the avoidance of doubt, any removal of any copyright, trademark or any other notices that are provided to you in connection with the Contents), transmitted to, copied or distributed to any other party, without the prior express written permission of the Firm. Trademarks, service marks and logos used on this Website may be trademarks or service marks or registered trademarks or service marks of either the Firm or other entities.

GSSP/GSAMS reserves the right, at any time and from time to time, in the interests of its own editorial discretion and business judgment to add, modify, or remove any of the Contents. These Terms and Conditions are not intended to, and will not, transfer or grant any rights in or to the Intellectual Property other than those which are specifically described herein, and all rights not expressly granted herein are reserved by the Firm or, where applicable, the third party providers from whom the Firm has obtained the Intellectual Property.

GSSP/GSAMS may, as a matter of convenience, include Content sourced from third party providers. The views and opinions expressed in such third party Content belong to such third party providers, and are for informational purposes only, and do not constitute any investment advice or recommendation by the Firm. The Firm will have relied upon and assumed (without independent verification) the accuracy and completeness of such information and neither agree nor disagree with the content herein.

LINKED WEBSITES

This Website may contain addresses or hyperlinks which lead you out of this Website to other websites or content on the Internet which are owned or operated by third parties. The Firm may not have reviewed all or any such websites to which this Website may link, and is not responsible for the content of any websites or pages linked to or linking from this Website. Such addresses or hyperlinks (including addresses or hyperlinks to the Firm’s own website material) are provided solely for your convenience and information. Accessing such websites or following such links to any other websites or pages shall be at your own risk. The Firm has not tested any information, software, or products found on any such websites and therefore, the Firm makes no representations concerning their content or sponsors, or the accuracy, suitability or appropriateness of the products, services, information, data, software, transactions or other material described therein or obtained or downloaded therefrom. The inclusion within this Website of such addresses or hyperlinks does not constitute an endorsement, authorization, verification, sponsorship, or affiliation by the Firm with respect to any website or content, or its owners, or its providers.

MONITORING BY GSI

Your use of this Website may be monitored by the Firm or its service providers, and the resultant information may be used by the Firm for its internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory organization.

GOVERNING LAW AND JURISDICTION

These Terms and Conditions shall be governed by and construed in accordance with the laws of Singapore. Any dispute arising out of or connected with these Terms and Conditions, including a dispute as to the validity, termination or existence of these Terms and Conditions, shall be referred to and finally resolved by arbitration conducted in English by a single arbitrator and administered by the Singapore International Arbitration Centre (“SIAC”) in accordance with the Arbitration Rules of the SIAC for the time being in force, which rules are deemed to be incorporated by reference in this clause. The seat of the arbitration shall be Singapore. Unless otherwise agreed between the parties: (i) in the event of a failure by the parties to agree on the sole arbitrator within 30 days of one party calling upon the other to do so, the arbitrator shall be appointed by the President for the time being of the Court of Arbitration of the SIAC; and (ii) the arbitrator shall be and remain independent and impartial of each party.

INDEMNITY

Without prejudice to the foregoing, you will indemnify, defend and hold harmless the Firm and its employees, servants, officers and agents (collectively the “Indemnitees”), from and against any and all liabilities, losses, settlement sums, charges, costs, expenses (including all costs of investigation and defence and solicitor and client costs), actions, proceedings, claims, demands and other damages which may be sustained, instituted, made or alleged against, or suffered or incurred by the Indemnitees, and which arise, directly or indirectly, out of, in the course of or in connection with one or more of the following: making available this Website, or having entered into these Terms and Conditions with you, or enforcing the rights under these Terms and Conditions, or acting upon any instructions which you may give in relation to this Website, or any negligence, fraud and/or misconduct on your part, or your failure to comply with or breach of these Terms and Conditions, or any of your use of this Website which is not in accordance with the Purpose.

You expressly acknowledge that you have checked and confirmed that you: (i) understand and accept the Terms and Conditions above and are legally entitled to view this Website; and (ii) understand that the information on this Website is not a promotion and that you will not treat it as such and that any information on this Website is not addressed specifically to you.

Should you not be in compliance with any of the Terms and Conditions, you must immediately discontinue from using this Website and refrain from accessing any pages of this Website.

GENERAL

Entire agreement: These Terms and Conditions shall constitute the entire agreement between you and the Firm relating to your viewing of this Website and supersede and replace in full all prior understandings, communications and agreements hereof.

Binding and conclusive: You acknowledge and agree that any records maintained by the Firm or its service providers relating to or in connection with this Website shall be binding and conclusive on you for all purposes whatsoever and shall be conclusive evidence of any information and/or data transmitted between the Firm and you. You hereby agree that all such records are admissible in evidence and that you shall not challenge or dispute the admissibility, reliability, accuracy or the authenticity of such records merely on the basis that such records are in electronic form or are the output of a computer system, and you hereby waive any of your rights, if any, to so object.

No waiver: The Firm’s failure or delay to enforce these Terms and Conditions shall not constitute a waiver of these terms, and such failure or delay shall not affect the right later to enforce these Terms and Conditions. The Firm would still be entitled to exercise its rights and remedies in any other situation where you breach these Terms and Conditions.

Cumulative rights and remedies: Unless otherwise provided under these Terms and Conditions, the provisions of these Terms and Conditions and the Firm’s rights and remedies under these Terms and Conditions are cumulative and are without prejudice and in addition to any rights or remedies it may have in law or in equity, and no exercise by the Firm of any one right or remedy under these Terms and Conditions, or at law or in equity, shall (save to the extent, if any, provided expressly in these Terms and Conditions or at law or in equity) operate so as to hinder or prevent its exercise of any other such right or remedy as at law or in equity.

Severability: If at any time any provision of these Terms and Conditions shall be or shall become illegal, invalid or unenforceable in any respect, the legality, validity and enforceability of the remaining provisions of these Terms and Conditions shall not be affected or impaired thereby, and shall continue in force as if such illegal, invalid or unenforceable provision was severed from these Terms and Conditions.

Rights of third parties: A person or entity who is not a party to these Terms and Conditions shall have no right under the Contracts (Rights of Third Parties) Act (Chapter 53B of Singapore) or any similar legislation in any jurisdiction to enforce any term of these Terms and Conditions, regardless of whether such person or entity has been identified by name, as a member of a class or as answering a particular description. For the avoidance of doubt, nothing in this clause shall affect the rights of any permitted assignee or transferee of these Terms and Conditions.

Assignment: You may not assign your rights under these Terms and Conditions without prior written permission of the Firm. The Firm may assign its rights under these Terms and Conditions to any third party.

Interpretation: Any reference in these Terms and Conditions to any provision of a statute shall be construed as a reference to that provision as amended, re-enacted or extended at the relevant time. In these Terms and Conditions, whenever the words “include”, “includes” or “including” are used, they will be deemed to be followed by the words “without limitation”. Clause headings are inserted for convenience only and shall not affect the interpretation of these Terms and Conditions. In the event of a conflict or inconsistency between any two or more provisions under these Terms and Conditions, whether such provisions are contained in the same or different documents, such conflict or inconsistency shall be resolved in favour of the Firm and the provision which is more favourable to the Firm shall prevail.

By clicking the "I Accept" button, you agree to abide by the terms and conditions listed below.

1

1-DAY YIELD

An annualised 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 annualised 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 annualised 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

AAA-RATED

MMFs rated AAA are judged to be of an investment quality similar to AAA-rated fixed income obligations, meaning they are considered to be of the highest quality. The highest MMF ratings by the top three ratings agencies are: AAAm with Standard & Poor’s, Aaa-mf with Moody’s, and AAAmmf with Fitch.

ABSOLUTE RETURN

The rate of return an asset actually achieves, rather than the  return it achieves relative to a benchmark index.

ACTIVE/FUNDAMENTAL

Where managers use extensive research before human judgement to identify companies that they believe will create long-term value.

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 advisers 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.

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 BOND

A bond based on the value of underlying assets such as bank loans or credit card loans.

ASSET-BACKED SECURITIES

A type of debt security that is based on pools of assets, or collateralised 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.

ASSETS UNDER SUPERVISION (AUS)

Includes assets supervised by GSAM and its investment advisory affiliates. AUS includes client accounts for which Goldman Sachs does not have full discretion.

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

BARRIERS TO ENTRY

The existence of high start-up costs and other obstacles that make it difficult for new firms to enter an industry and compete for revenue.

BASIS RISK

Risk of a mismatch in price between the hedging instrument and the underlying asset.

BENCHMARK

A benchmark is a basket of bonds representing the market, e.g. a specific sector or a geographical region. Comparing a fund to the returns achieved by the benchmark is a way of evaluating its performance.

BENCHMARK INDICES

Indices are often used to evaluate a fund’s performance. For example, a UK gilt fund might be compared to the FTSE UK Gilts All Stocks Index.

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.

BRIC

Brazil, Russia, India and China.

BUSINESS DEVELOPMENT COMPANY (BDC)

US company that invest in small- and mid-sized businesses.

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.

CARRY TRADE

Making use of low rates of interest on one currency to borrow that currency for investment in another currency offering a higher rate of return.

CERTIFICATES OF DEPOSIT

A debt instrument issued by a bank that will pay interest— periodically or at maturity—and principal when it reaches maturity. A bank’s creditworthiness is rated by impartial agencies such as Moody’s and Standard & Poor’s. Unlike time deposits, certificates of deposit trade actively on the secondary market.

CHARACTERISTICS

The measurement and statistics of securities held by each portfolio and its benchmark.

COLLATERAL

An asset (cash or securities) posted from one counterparty to another, and held as a guarantee against the value of a specified portfolio of trades. Commonly referred to as margin, the collateral also acts to mitigate credit risk.

COLLATERAL CALL

A demand by a derivatives counterparty for an investor to transfer cash or securities to collateralise movements in the value of derivatives contracts.

COLLATERALISED 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.

COMMERCIAL MORTGAGE-BACKED SECURITIES (CMBS)

A mortgage-backed security secured via a loan on a commercial property.

COMMERCIAL PAPER

Short-term notes issued by a wide variety of corporations such as domestic and foreign firms and financial institutions. These short term obligations have maturity dates of up to one year.

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.

CONVERTIBLE BOND

A type of bond that allows the holder to exchange it for a number of shares of the issuer’s common stock.

CORPORATE CREDIT BONDS

Bonds issued by a company.

CORRELATION

Correlation measures the strength of the relationship between two variables, such as the relationship between the performances of two assets. It is a relative measure that indicates how one variable moves in relation to another one. Correlation values can be anywhere between -1 (perfectly negatively related), 0 (not related) and 1 (perfectly positively related).

COUNTERPARTY

Legal and financial term used to identify a party in a derivatives contract.

COUNTERPARTY RISK

Legal and financial term used to identify a party in a derivatives contract.

COUPON

Regular payments (usually every six months) paid throughout the bond’s life. For example, a £1,000 bond with a coupon of 5% will pay £50 a year.

COVERED BONDS

Covered bonds are debt instruments with dual recourse to both the issuer and a segregated pool of collateral, usually mortgages.

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 EVENT

In the context of a credit default swap, a credit event can include company restructuring, insolvency or default.

CREDIT RISK

Credit risk is the possibility that the country will default on its debt.

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.

CURRENCY FORWARD CONTRACT

A contract designed to lock in the price at which an investor can buy or sell a currency at a future date. Usually, no cash exchanges hands until the expiration date, when the contract is settled on a net basis based on its notional amount.

CURRENT YIELD

The annual return on the amount paid for a bond. Derived by dividing the bond’s interest payment by its purchase price.

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

DECOUPLING

This occurs when the returns from a particular asset class become uncorrelated with another asset class where there has traditionally been a strong relationship, e.g. the developing economies have recently shown signs of decoupling from the developed world.

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.

DIVERSIFICATION

A risk management technique involving the spreading of an investment portfolio among multiple vehicles with varied levels of risk, industry and geographic exposure.

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.

DYNAMIC HEDGE

A hedging technique which seeks to limit an investment’s exposure by adjusting the hedge according to changes in the underlying security. As the value of the underlying moves, new positions can be taken in options or futures to offset the movement.

E

EUROPEAN SECURITIES AND MARKETS AUTHORITY (ESMA)

ESMA (formerly Committee of European Securities Regulators-CESR) is an independent EU Authority that contributes to safeguarding the stability of the European Union’s financial system by ensuring the integrity, transparency, efficiency and orderly functioning of securities markets, as well as enhancing investor protection. In particular, ESMA fosters supervisory convergence both amongst securities regulators, European Supervisory Authorities competent in the field of banking (EBA), and insurance and occupational pensions (EIOPA). In 2010, ESMA released guidelines for a common definition of European MMFs.

EARNINGS PER SHARE (EPS)

This is the company’s profit divided by the number of shares. A company with £2m in earnings and ten million shares would have an EPS of 20 pence.

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.

EMERGING MARKETS DEBT EXTERNAL

Emerging markets debt issued in another country’s currency.

EMERGING MARKETS DEBT LOCAL

Emerging markets debt issued in local currency.

ENTERPRISE VALUE

The market capitalisation 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 capitalisation.

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.

EQUITY RISK PREMIUM

The extra return that the stock markets must provide over gilts to compensate for the additional investment risk.

EXCHANGE-TRADED DERIVATIVES CONTRACTS

Standardised derivatives contracts (e.g. futures contracts and options) that are transacted on an organised exchange.

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

The operating costs of a MMF expressed as a percentage of the fund’s average net assets for a given time period.

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 reimbursements), expressed as a percentage of the fund's average net assets.

F

FINANCIAL DERIVATIVE / DERIVATIVE INSTRUMENT

A financial product whose price is determined by the performance of another asset.

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.

FLOATING RATE NOTES (FRNS)

Debt instruments with variable interest rates. The coupon rate of these notes is pegged to a benchmark floating rate, typically LIBOR, and refixed quarterly to three-month LIBOR or semiannually to six-month LIBOR rates.

FOREIGN EXCHANGE PRIME BROKERAGE AGREEMENT (FXPB)

A contractual agreement that enables a party to trade with multiple foreign-exchange forward counterparties under an ISDA Master Agreement or an IFEMA, while having all positions held and maintained by one broker/dealer.

FORWARD RATES

The expected rate of a currency at an agreed time in the future based on interest rates relative to other currencies.

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.

FRONTIER MARKETS

The frontier, or pre-emerging, markets are investable but have lower market capitalisation and liquidity than more established emerging markets. Investors are attracted to these markets by the prospect of higher potential returns, although they need to be aware of the increased risks. Frontier markets include Mauritius, Romania and Vietnam.

FUNDAMENTAL

An investment approach that involves studying the economic and financial factors that influence the price of an asset.

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

G7

A group of seven of the largest developed nations, whose representatives meet periodically to discuss economic issues. It was formed in 1976 and consists of Canada, France, Germany, Italy, Japan, United Kingdom, and United States.

GILTS

Bonds issued by the UK government.

GOVERNMENT-BACKED SECURITIES

Debt instruments issued by government and supra-national agencies, offering investors an additional degree of safety.

GROWTH MARKETS

Those economies that represent at least 1% of global GDP are named by GSAM “Growth Markets”. Eight countries currently satisfy this criterion: each of the BRIC countries (Brazil, Russia, India and China), as well as the four largest “Next 11” (N-11) countries: Mexico, Korea, Turkey and Indonesia. These are the economies that are most likely to experience rising productivity coupled with favourable demographics and, therefore, a faster growth rate than the world average going forward. Additional characteristics that we implicitly use to distinguish Growth Markets from Emerging Markets include their growth environment, as well as the level of financial development and accessibility to investors.

H

HAIRCUT

The specific amount of overcollateralisation that might be required when a particular asset is taken as collateral.

HEDGING

Insuring against future currency movements that could prove costly. A popular method of hedging is to enter into a forward contract so as to guarantee that a foreign currency sale or purchase will be concluded at the agreed rate.

HIGH YIELD BOND

Bond rated below Investment Grade.

I

INCEPTION DATE

The commencement date of a Fund’s performance.

INDEX-LINKED SECURITY

A bond where income payments are related to a specific price index.

INFORMATION RATIOS

A measure of the excess return a manager has delivered divided by the risk taken relative to the benchmark. The higher the information ratio the better the level of return relative to the risk.

INITIAL MARGIN

Upfront collateral requirement that is set aside as a guarantee to the underlying futures contract; generally a percentage of the notional amount of a futures contract.

INTEREST RATE RISK

Interest rate risk is the risk that a rise in rates will decrease the value of the bonds the investor holds.

INTEREST RATE SWAP

An agreement between two counterparties to exchange future cash flows for a set period of time. Typically, one counterparty agrees to pay a fixed interest rate in exchange for receiving a floating interest rate in the same currency. The cash exchanged at each payment date is based on the notional amount agreed upon at the beginning of the contract.

INTEREST RATE SWAPTION

This gives the buyer the option to enter into an interest rate swap. In exchange for a premium, the buyer has the right, but not the obligation, to enter into a specified swap with the issuer on a specified future date.

INVESTMENT COMMENTARY

Commentaries designed to track recent market events and product performance. Usually provided on a monthly, quarterly or annual basis.

INVESTMENT GRADE BOND

A relatively safe bond with a credit rating of BBB or above from an independent rating service such as Standard and Poor’s.

INVESTMENT GRADE CORPORATE BONDS

Bonds issued by companies with high credit ratings.

ISSUER

The company, government or other entity issuing a bond.

J

JUNK

See High Yield

K

KIID (KEY INVESTOR INFORMATION DOCUMENT)

A document, required by law, to help investors understand the nature and the risks of investing in a fund.

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.

LIBID (LONDON INTERBANK BID RATE)

The average interest rate at which major London banks borrow Eurocurrency deposits from other banks. LIBID is calculated through a survey of London banks to determine the interest rate at which they are willing to borrow large Eurocurrency deposits.

LIBOR (LONDON INTERBANK OFFERED RATE)

The London Interbank Offered Rate is an interest rate at which banks can borrow funds from other banks in the London interbank market.

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.

LIQUIDITY RISK

Risk of loss stemming from being unable to unwind a position due to the unavailability of a willing counterparty to offset the trade.

LOCAL CORPORATE DEBT

Debt denominated in the local currency of the issuing company, rather than an external currency such as the US dollar or euro.

LOCAL SOVEREIGN DEBT

Emerging market government debt denominated in the currency of the issuing country rather than an external currency such as the US dollar or euro.

LONG-DATED BOND

A bond whose revenue stream is generated over a long period of time, 20 years for example.

LONG-ONLY

Physically owning the stock. The goal is to profit if the stock price rises.

LONG-TERM

A view of around 18 months or more.

M

MARGIN

Is the amount of collateral required to enter into a derivative transaction, usually in the context of futures and primebrokerage accounts.

MARKET CAPITALISATION

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.

MASTER LIMITED PARTNERSHIP (MLP)

A type of limited partnership company that is publicly traded on a securities exchange.

MATURITY

The date on which the issuer will repay the par value of the bond. This can range from a short period measured in months to the very long term, over 40 years.

MEDIUM TERM

A view over the next three to 18 months.

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.

MORTGAGE-BACKED SECURITY

A security based on an underlying pool of mortgages.

MUNICIPAL BOND

A debt security issued by a state, municipality or county to finance its capital expenditure.

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.

NEGATIVE DURATION

Strategy used by a portfolio manager with a high conviction outlook that interest rates will rise. By adjusting the holdings in the portfolio, a manager can amend the average duration to make it negative. A portfolio with a ‘negative duration’ may increase in value when interest rates rise.

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.”

NON-INVESTMENT GRADE BOND

Also known as a junk bond or a high yield bond, it will have a credit rating below BBB/Baa and is judged less likely to pay interest or repay capital reliably. It usually pays a high interest rate to compensate and attract investors.

NOTES

Bonds issued by the US Treasury with a life between one year and 10 years.

NOTIONAL AMOUNT

The nominal or face amount that is used to calculate payments made on swaps and other derivatives instruments. This amount generally does not change hands and is thus referred to as notional.

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.

OPERATIONAL RISK

Risk of loss stemming from potential operational flaws (e.g. poor due diligence, system malfunctions) on the part of a counterparty in a derivatives contract.

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.

OVER-THE-COUNTER (OTC) DERIVATIVES CONTRACTS

Privately negotiated derivatives contracts that are not transacted in organised exchanges.

P

PAR VALUE

The amount paid to the bond holder at maturity, based on the value of the bond at the issue date. Also known as face value.

PASSIVE/INDEXING

Index or passive managers construct a portfolio so the returns and the stocks held mirror as closely as possible those of a chosen index, such as the FTSE 100 or MSCI World Index.

PREFERRED STOCK

Stocks with properties of both and equity and debt instruments and with priority over common stock in the payment of dividends.

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

A gauge of how expensive a stock is. To calculate the P/E ratio, divide the stock’s share price by the after-tax earnings per share. For example, the P/E ratio of company A with a share price of £10 and earnings per share of £2 is five. The higher the P/E ratio, the more the market is willing to pay for each pound of annual earnings.

PRINCIPAL

The amount of money invested in the bond. The principal does not equate to the face value of the bond as they are bought and sold on the secondary market at prevailing prices.

PROSPECTUS

The traditional, long-form prospectus with which most mutual fund investors are familiar.  The prospectus contains the important information included in the KIID, 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.  

PROSPECTUS SUPPLEMENT

A supplementary document to the Prospectus, the purpose of which is to describe in more detail one or more Portfolio.  

PURCHASING POWER PARITY

An economic theory that adjusts the exchange rate between countries to make it equivalent to each currency’s purchasing power. This adjustment means that an identical good in two different countries will be given the same price when expressed in the same currency.

Q

QUANTITATIVE EQUITY STRATEGY

Quantitative strategies seek to exploit current investment opportunities; aiming to produce consistent, uncorrelated returns utilising top-down and bottom-up approaches, which employ fundamental characteristics and quantitative tools. Strong quantitative managers do not rely solely on historical analysis but, rather, blend data with sound economic and behavioural analysis.

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.

QUASI-SOVEREIGN DEBT

JP Morgan defines quasi-sovereign as debt issued or guaranteed by an entity that is 100% owned or controlled by a government. However, some investors also include debt that is substantially guaranteed debt.

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.”

RATING

Independent assessment of an issuer’s credit worthiness and ability to meet required interest and principal repayments.

REAL ESTATE INVESTMENT TRUST (REIT)

Company that owns income-producing real estate, e.g. office buildings, shopping centres, hotels, etc.

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.

RETURN ON EQUITY (ROE)

A measure of how good a firm is at delivering profit and generating earnings growth. ROE is calculated by dividing the year’s fiscal net income by total marketing capitalisation and expressed as a percentage. A high ROE does not automatically equate to a good investment.

S

SECURITISED

A financial product created by combining several types of different assets, splitting them up and bringing them to market.

SECURITISED BOND

Bond whose interest and principal payments are backed by the cash flows from a portfolio or pool of other assets.

SEMI ANNUAL FINANCIAL STATEMENT

An audited, FCA-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 annualised 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.

SHORT-TERM

A period of up to three months.

SOVEREIGN DEBT

Debt issued or guaranteed by a government. In an emerging market, it is denominated in a major external currency, such as US dollars, or in local currency. The JP Morgan EMBI Global Diversified Index is the oldest of the emerging market debt benchmarks.

SPOT RATES

The rates of currencies and others assets now.

SPREAD DURATION (YRS)

A measure of the sensitivity of a bond’s price to spread changes.

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.

STOCKS

An equity investment, or ownership securities, that represent ownership in a corporation.

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

THE NEXT 11 (N-11)

The N-11 refers to a group of next-generation emerging markets that have the potential to rival the G7, although further down the road than BRIC countries. These countries include Bangladesh, Egypt, Indonesia, Iran, South Korea, Mexico, Nigeria, Pakistan, Philippines, Turkey and Vietnam.

THRESHOLD

Amount by which collateral calls are reduced; the amount of exposure parties are willing to accept.

TOTAL FUND ASSETS

The market value of securities in a mutual fund portfolio.

TOTAL RETURN SWAP

An agreement between two counterparties to exchange future cash flows for a set period of time. Typically, one counterparty agrees to pay the total rate of return of an index in exchange for receiving a floating interest rate plus a premium. The cash exchanged at each payment date is based on the notional amount agreed upon the beginning of the contract, the performance of the underlying benchmark and the floating rate.

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.

TREASURIES

Bonds issued by the US government.

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.

U

UNCONSTRAINED INVESTING

Allowing a fund manager greater freedom to take positions and hold stocks.

UNDERTAKINGS FOR COLLECTIVE INVESTMENT IN TRANSFERABLE SECURITIES (UCITS)

set of European Union Directives that aim to allow collective investment schemes to operate freely throughout the EU on the basis of a single authorisation from one member state but also set a series of constraints in how they invest.

US AGENCY MORTGAGE-BACKED SECURITIES (US AGENCIES)

The purchase of mortgage-backed securities issued by US government-sponsored agencies.

US TREASURIES

US government bonds with a duration of less than one year.

V

VALUE AT RISK (VAR)

A measure of how the market value of a portfolio can potentially decrease over a certain period of time. The technique estimates the probability of losses based on statistical analysis of historical price trends and volatilities.

VARIANCE SWAP

This type of volatility swap gives a payout that is linear to variance rather than volatility.

VARIATION MARGIN

A top up of the cash collateral requirement that may be required due to adverse movements in the value of the futures contract.

VOLATILITY

The manner in which the price of an investment moves up and down. If prices fluctuate dramatically over a short period of time, a market is said to be highly volatile.

VOLATILITY SWAP

A forward contract where the underlying is the volatility of a specified product. This allows investors to speculate on how volatile a stock will be.

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 capitalisation level in the index or portfolio. Companies with a larger market capitalisation 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 capitalisation (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 capitalisations, half will have lower.

Y

YIELD

Yield is the return that is actually earned on a bond, based on the price paid and the interest payments received. There are two types of bond yields: current yield and yield to maturity.

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 CURVE RISK

Risk of loss stemming from shifts in movements in the yield curve.

YIELD TO MATURITY

This is the total return an investor will receive by holding a bond until it matures, including all the interest received from the time of purchase until maturity, plus any gain or loss if the bond was purchased at variance to its par value.