An asset class is a group of assets that are sorted based on specific characteristics. Typical asset classes include cash, bonds, equities, real estate, commodities, and hedge funds.
An asset class is a group of assets that are sorted based on specific characteristics. Typical asset classes include cash, bonds, equities, real estate, commodities, and hedge funds.
A fund’s assets under management (AuM) is the value of all invested assets measured at market value (assets side of the fund balance sheet).
The base currency is the fund’s accounting currency. Since the fund assets can also include securities in other currencies, these securities first need to be converted into the base currency using prevailing exchange rates.
Each fund generally consists of various share classes, which may be denominated in different currencies. The total net assets and the net asset value of a share class are always disclosed in the currency of the share class.
A benchmark or a reference index is a basis of comparison for measuring relative investment performance. The benchmark defines a reference portfolio that can be used to measure the performance of the actual portfolio.
This is a strategy to mitigate or exclude unwanted exchange-rate risks with derivatives.
The share classes of an investment fund may have different distribution policies. A distinction is made here between accumulating and distributing share classes.
Distributing share classes of an investment fund regularly pay out share dividends, bond interest, and other income. The distributions are credited to the investor’s clearing account. This regular income can then either be otherwise invested or used for personal expenditures.
Accumulating share classes of an investment fund reinvest the income directly back into the fund assets.
Duration is a measure of how sensitive the price of a bond or another debt security is to changing interest rates. The duration (also known as the Macaulay duration) is expressed in years and shows the weighted average time until all remaining cashflows of a bond are received, including coupons and nominal value repayments.
ESG stands for environmental, social, and governance. ESG factors can be incorporated alongside key financial data in the evaluation of a company’s performance.
An exchange-traded fund (ETF) is a fund that trades on a stock exchange. Only so-called authorized participants are permitted to make subscriptions and redemptions at the net asset value. Other market participants buy and sell the shares of an ETF on the stock exchange. Market makers regularly provide bid and offer prices for the shares of the ETF. See also Index fund.
An index fund is an investment fund that strives to replicate a specific reference index as closely as possible. Fund shares can typically be subscribed and redeemed on a daily basis at the net asset value. See also Exchange-traded fund.
An indirect real estate investment does not invest directly in individual properties, but rather in listed and non-listed real estate funds and equities from the real estate sector.
By issuing a limit order, a client sets a minimum price (in the case of a sale) or a maximum price (in the case of a buy) at which they would like their order to be executed.
The market price is the current price at which an asset or service can be bought or sold. It is determined by supply and demand. While shares of open-ended funds are usually bought and sold at net asset value (plus or minus a subscription or redemption spread), the market price of an exchange-traded fund may be different from its net asset value.
The Morningstar rating is a relative rating that is given to funds within the same category according to their risk-adjusted return. The Morningstar rating is awarded on a scale of one to five stars. In each category, the 10% of funds with the best risk-adjusted returns receive five stars, and the 10% of funds with the worst performance just one star. 22.5% of funds are awarded two or four stars, and 35% of funds per category receive three stars. The ratings are updated monthly.
The net asset value (NAV) is the market value of a fund share calculated by dividing the total net assets by the number of fund shares issued.
The ongoing charges figure, like the total expense ratio (TER), is a metric used to determine the annual fund costs charged to the investor. These charges comprise fees for portfolio management, fund administration, securities custody, and other costs, such as for index licenses. However, ongoing charges do not include portfolio transaction costs.
Ongoing charges figures are published monthly. The figure can vary over time and therefore should not be regarded as a fixed amount. See also Total expense ratio (TER).
Securities lending involves one party lending securities to another market participant. With a Credit Suisse Index Fund (CSIF), the ownership rights are transferred (for equities, including voting rights), but not the entitlement to dividends or interest. In return, the index fund receives collateral (e.g. in the form of other securities or cash) and a fee.
As the lender, the index fund can demand the securities back subject to the customary market value date. For index funds, securities lending provides the opportunity to generate an additional return. The risks associated with securities lending include counterparty risk as well as the risk that the value of the collateral provided will no longer be sufficient to cover the outstanding debt.
CSIFs with the word “Blue” in their names explicitly exclude securities lending.
Many investment funds offer different share classes. These are shares of the same fund.
Share classes differ, for example, in terms of ongoing charges, distribution of income (accumulated or distributed), currency (with or without currency hedging), and minimum investment amount.
Each share class usually has its own valor number, security identification number, ISIN, and other master data. Information on the individual share classes can be found in the respective fund prospectus.
Small-cap stocks are shares of companies that have a low market capitalization. By contrast, large-cap stocks, also known as standard stocks, are shares of companies with a high market capitalization that are included in leading stock market indices (e.g. SMI, Dow Jones, or Stoxx50).
A spread generally refers to the difference between two prices or yields. When talking about prices, the term “bid/ask spread” is used. In the case of bonds, the spread often refers to the yield differential of a bond compared with a benchmark bond with the same maturity, generally government bonds, or compared with bonds of the same quality with a different maturity.
Synthetic risk and reward indicator (SRRI): The fund’s risk and reward profile shows the variations in value an investment in this fund would have undergone over the past five years, whereby simulated performance data is used in the case of missing history. The fund’s risk rating may change in the future. It should be noted that higher possible gains generally also mean higher possible losses. The lowest risk category does not mean that the fund is risk free. The SRRI is calculated on the basis of the Committee of European Securities Regulators/10-673 Directive.
Stamp duty is a turnover tax levied in Switzerland when securities are bought or sold.
Credit Suisse Index Funds (CSIFs) with a Swiss fund domicile are exempt from stamp duty. This puts them at an advantage over index funds domiciled abroad, which are subject to stamp duty on subscriptions and redemptions of shares.
Subscription and redemption fees comprise a spread in favor of the fund assets. These cover the transaction costs that are incurred when buying and selling securities in the fund, ensuring that existing investors are always protected from the investment costs incurred by new investors. The spread allows investors to benefit from more favorable entry conditions while also safeguarding the interests of all existing investors.
The total expense ratio (TER) is a measure of the annual fund costs charged to the investor. These charges comprise fees for portfolio management, fund administration, securities custody, and other costs, such as for index licenses. However, it does not include any transaction costs.
The TER is published annually for funds under Swiss law, and semi-annually for funds under Luxembourg law. The figure can vary over time and therefore should not be regarded as a fixed amount. See also Ongoing charges.
Total net assets (TNA) are a fund’s assets under management (AuM) less liabilities (liabilities side of the fund balance sheet).
Total return (TR) describes the overall return of a security or a securities portfolio. This includes all return components such as price changes as well as dividend and interest income. In the case of hypothetical portfolios and especially in the case of indices, the total return is calculated on the basis of the assumption that distributions will be fully and immediately reinvested without changing the portfolio structure.
The tracking error measures the relative risk of a portfolio compared with a reference portfolio or an index. The lower the tracking error, the more precisely a portfolio replicates its reference index. In the case of index funds, a tracking error close to zero is therefore typically a sign of quality. Technically speaking, the tracking error is defined as the standard deviation of the portfolio’s relative return versus the reference index over a specific period.
When the tracking error is calculated at the end of a period based on actual performance, it is described as realized or ex post. If a model is used to forecast the tracking error, this is referred to as the ex-ante or expected tracking error.
Transaction costs arise in portfolio management when securities are traded. Transaction costs include broker commissions, exchange fees, clearing and settlement costs, and withholding and capital transfer taxes.
The turnover rate is the percentage share of transactions carried out each year in the index or portfolio.
Withholding tax is the tax levied by the country of investment on dividends and interest. Foreign investors can reclaim local withholding taxes in full or in part provided there is a double taxation agreement in place between the two countries in question. Some tax treaties provide for exemption at source. This means that the exempted investors are credited their dividends and interest before the deduction of any withholding tax.
Year to date (YTD) refers to the period from the beginning of the year until the current date. This term is frequently used to indicate the return achieved since the beginning of the year.
