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Glossary of investment terms Chapter 2

Glossary of investment terms Chapter 2

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Balanced fund – Mutual funds that seek both growth and income in a portfolio with a mix of common stock, preferred stock or bonds. The companies selected typically are in different industries and different geographic regions.

Bear market – A bear market is a prolonged period of falling stock prices, usually marked by a decline of 20% or more. A market in which prices decline sharply against a background of widespread pessimism, growing unemployment or business recession. The opposite of a bull market.

Benchmark – A standard, usually an unmanaged index, used for comparative purposes in assessing performance of a portfolio or mutual fund.

Best-in-class –

A top performing product, service or person within a category or peer group.

A sustainable investment style that involves investing in companies that lead their peer groups with respect to sustainability performance.

Beta – A measurement of volatility where 1 is neutral; above 1 is more volatile; and less than 1 is less volatile.

Blue chip – A high-quality, relatively low-risk investment; the term usually refers to stocks of large, well-established companies that have performed well over a long period. The term Blue Chip is borrowed from poker, where the blue chips are the most valuable.

Board of Trustees – A governing board elected or appointed to direct the policies of an institution.

Bond – A bond acts like a loan or an IOU that is issued by a corporation, municipality or the U.S. government. The issuer promises to repay the full amount of the loan on a specific date and pay a specified rate of return for the use of the money to the investor at specific time intervals.

Bond fund – A mutual fund that invests exclusively in bonds.

Breakpoint – The level of dollar investment in a mutual fund at which an investor becomes eligible for a discounted sales fee. This level may be achieved through a single purchase or a series of smaller purchases.

Bull market – Any market in which prices are advancing in an upward trend. In general, someone is bullish if they believe the value of a security or market will rise. The opposite of a bear market.