Glossary of investment terms

The measure of an investment’s gains or losses over a specific period, independent of any benchmark or index.

Any individual, entity, or financial institution that meets specific financial criteria relating to income, net worth, or investment knowledge set by regulatory authorities.

A style of fund management where the fund manager aims to outperform a benchmark, relying on analytical research and personal judgement to decide what securities to buy, hold, or sell.

Investments outside traditional investments (stocks, bonds, mutual funds). Alternative investments include real estate and commodities (gold, oil, natural gas), including special investment vehicles such as private equity, hedge funds, and mortgage funds.

The total amount of money, interest, or fees paid on a loan in a year.

The total amount of money or interest, including compounded returns, earned on an investment in a year.

Strategic division of a portfolio among different asset classes, such as stocks, bonds, and cash.

Investments with similar types of characteristics. These can be equities (shares), bonds, cash, or real estate.

Resources with economic value owned by individuals or companies.

Total market value of all the securities a firm owns or manages on behalf of its clients.

Independent entity that regularly reviews a firm to ensure the accuracy of financial records and compliance with tax standards and regulations.

Equivalent to 1/100 of a percent, it describes the percentage change in interest rates.

A sustained period of falling stock prices, typically by 20% or more.

An index or standard against which an investment fund’s performance is measured.

Stock issued by a large and well-established company with an excellent reputation and sound financial structure.

A portfolio consisting primarily of bonds.

Debt instruments which companies or governments issue with a promise to pay the original amount of investment and a specified amount of interest at maturity.

An individual or institution that arranges the buying and selling of securities on an exchange.

A sustained period of rising stock prices, typically by 20% or more.

A financial contract that gives the holder the right to buy an asset at a specified price within a specified time.

Federal law governing the collection and administration of income tax in Canada.

The umbrella organization consisting of the ten provinces and three territories in Canada responsible for securities regulation across the country.

Total financial assets invested in securities to generate value.

This occurs when an asset is sold at a higher price than an investor originally paid.

An investment strategy aimed at protecting an investor’s original capital investment from any significant losses.

The net balance of cash moving into and out of business from any investment activities in a specific period.

A savings account offered by banks and credit unions that holds your money for a fixed period at an agreed interest rate and maturity date. At the end of the term, the investor receives the money originally invested plus the interest.

Physical property securing a loan.

Loans secured by commercial properties to fund the development of a business premises.

Broker’s fee for purchasing or selling securities as an agent.

Tradeable goods and raw materials, such as gold, oil, and natural gas.

Mutual funds that invest in either the commodities or the companies that produce these commodities.

Represents the shares of ownership in a corporation. It comes with voting rights and profit sharing through dividends. Common stock is one type of stock that is traded on public exchanges.

Interest earned on both principal and accumulated interest.

Increasing value of an asset by earning returns (or interest) on the original investment and accumulated returns.

A type of bond issued by a company to raise capital.

An investment strategy of consistently buying a fixed dollar amount of an asset at regular intervals, regardless of price.

The interest payment to the bondholder (investor) by the issuer (government or company) of the bond.

A measure of the creditworthiness of a financial instrument or a financial custodian.

The possibility of loss due to a borrower’s failure to meet their obligations to repay a debt.

Borrowed money.

Financial instruments whose value is derived from an underlying asset. It is used to speculate and obtain leverage when the asset has achieved an agreed-upon price at some point in the future.

The disbursement of an asset’s earnings to the investors.

Investing among and within different asset classes to spread the risk and lessen exposure to any one type of asset.

The share of a company’s profit to its shareholders in proportion to the number of shares they hold.

A program that allows investors to reinvest their cash dividends to purchase additional shares automatically. For example, Amur Capital MIC funds are eligible for DRIP.

Bonds issued and traded within a country’s boundary and denominated in that country’s currency.

A measurement that indicates how much a bond’s price might change if interest rates fluctuate.

The value ratio between a company’s annual income and the number of outstanding stock shares.

The proportionate interest in a company.

A type of index fund that mimics the performance of a specified index by investing in the companies included in that index. Like stocks, ETFs can be traded throughout the day.

The completion of a purchase or sale order for a security.

A section of capital markets where securities can be sold without the requirements of a prospectus and do not have to be publicly traded.

Registered securities dealer that trades prospectus–exempt securities, such as derivatives, private equity, and mortgage funds.

Total capital invested in a particular asset.

The duty imposed by law on a management company and its representatives to act in the best interests of their investors.

A formal record that details a company’s financial performance over a specific accounting period.

A one-year or 12-month period that companies and governments use for financial reporting.

Debt securities that give a steady payment of interest and a promise to repay the amount owing at maturity. Fixed income assets include bonds, treasury bills, and mortgages.

A legal entity whose income is passed straight to its investors and is taxed only once at the investor level. As a result, the investment avoids double taxation, which is common with income from regular corporations. Mortgage Investment Corporations (MICs) are considered flow-through entities.

The investment gains or losses at a specified point in time.

A short, easy-to-read document designed to give investors a high-level view of a fund. This includes the fund’s investment objectives, risk level, cost, and historical performance.

An institution that manages investments on behalf of their investors.

A person appointed for the day-to-day administration, including strategic allocation and management, of a portfolio of a fund.

Fixed-income securities issued by a government to finance various public initiatives, such as infrastructure spending and projects.

Common stock of a company with above-average earnings growth rate or potential for growth.

A special deposit that allows investors to get the original amount invested by the maturity date, plus the compounded returns based on an agreed interest rate.

An investment fund that invests in non-traditional assets and whose fund manager employs non–traditional investing methods, such as leverage, shorting, or derivatives.

A risk management strategy that involves buying or selling an investment to reduce the risk of loss due to adverse price movements. Investors do this by taking opposite positions in the same or related assets to offset the loss of an existing position.

State of an asset that cannot be easily sold or exchanged for cash.

Profit from an investment in the form of interest, dividends, or capital gains.

The disbursement of an asset’s earnings to the investors.

Built or bought property that is used as capital investment.

A group of securities, derivatives, or other financial instruments used to measure the performance of a specific market. It is often used as a benchmark to evaluate an investment’s performance.

Investment funds that follow a benchmark index through its stock selection and weightings.

The broad, general rise in prices of goods and services in an economy. Inflation erodes the real value of an investment’s return by decreasing your ability to buy as much for the same amount of money.

Monetary charge for borrowing money.

The actual or inherent worth of an asset independent of its market value.

The rating given by credit rating agencies, such as Standard & Poor’s, Fitch, and Moody’s, to corporate and municipal bonds. A bond that is investment grade means it has a low to moderate risk of default.

The period of time investors wants to keep investing.

The types of investments such as equities, bonds, and money market instruments.

The approach taken to achieve an investment objective.

The gain or loss generated by an investment over time.

Any individual or entity that uses their capital with the expectation of profit or interest.

The process of offering securities to investors.

Price at which shares are first sold to investors.

A legal entity that distributes securities in the form of shares or bonds.

A standard due diligence process used by investment firms to identify and verify client’s information before making any investment recommendations.

The degree of how much debt or borrowed capital is used to undertake an investment.

The efficiency or ease of selling an asset without significantly affecting its price.

A ratio that measures the amount of financing used to buy an asset based on the market value of the collateral asset.

A percentage charge levied by the management company for the administration of an investment fund.

A type of risk that impacts the market as a whole, instead of individual stocks or industries.

The current assessed value of a property. In investments, it refers to the value or worth of a stock that an investor pays or receives at any given time.

The date on which a loan or a bond comes due.

A part of the capital market where short-term investments are bought and sold. Treasury bills and other government securities maturing in three years or less and GICs with a year left to maturity are some of the securities traded in the money market.

A financial contract between a lender and a borrower used for the purchase or refinance of real estate. It obligates the borrower to repay the borrowed amount (the principal) along with interest over a specified period. The property acts as collateral for the loan, which the lender has the right to take possession of if the borrower fails to make payments.

Mortgage investing is a type of alternative investment in which pooled funds from investors are managed by a Mortgage Investment Corporation (MIC) and lent to qualified borrowers in the form of mortgages. Investors then receive income from the mortgage fees and interest as dividends, which they can redeem as cash or reinvest for further investment growth.

A company created specifically for mortgage investments in Canada.

A collection of investments comprising of stocks, bonds, or other funds professionally managed by a portfolio or fund manager. Mutual fund shares are redeemable at the fund’s current net asset value per share.

The value of a company’s assets minus any liabilities and expenses.

A type of investment account that is taxable when the investments held in the account earn an income. Despite having no tax benefits, most non-registered accounts have no contribution ceiling or tax limitations.

A legal document prepared by a company offering securities, that details to investors about the issuer’s business and the securities being offered.

A financial contract that allows the holder the right to buy or sell a financial product at a specified price within a specified time.

A style of investment management that aims to invest in a portfolio of securities that tracks a specific index with minimal trading.

An investment’s level of growth and return over time.

A collection of assets owned by an individual or entity. An investment portfolio may comprise of stocks, bonds, commodities, or mortgage funds.

Specialists who manage the assets of an investment fund.

A type of equity that represents ownership of a company. Preferred stock comes with fixed dividends but no voting rights. However, during liquidation, preferred stockholders are paid first before common stockholders.

The amount paid above the face value of a financial instrument.

The market for newly issued securities.

An individual or entity’s capital or initial amount invested or borrowed.

Investments in entities or companies that are not publicly listed or traded. Private equity investments are characterized by acquiring companies and managing and growing them before selling them for a profit.

Investments in assets not publicly traded on the public exchange or stock market.

Sale of securities to a relatively small group of investors through a private offering rather than a public exchange.

An offering document that discloses an issuer’s business, management, and risks associated with their investment offerings. It must be filed with applicable securities regulator for review and approval.

Real estate in investing is the purchase, management, sale or rental of a property to gain profit.

A pool of investors’ money for the purpose of investing in income-generating properties. Most REITs are also publicly traded like stocks.

The process of realigning a portfolio to achieve a desired asset mix. It is done to meet an investor’s risk comfort and financial goals.

The process of withdrawing units or shares to gain returns from the funds.

An investment product offered by the Canadian Government and registered with the Canada Revenue Agency (CRA) to qualify for tax benefits. Income earned on investments held under these accounts is tax-deferred until withdrawal (RRSP) or tax-sheltered entirely (TFSA).

The use of investment earnings, such as dividends or interest, to purchase additional shares or investments thereby compounding the original investment over time.

A document from an investment company that describes the company’s products and services, fees, and relationship to its investors. It also details the level of risk involved in investing with the company as well as any conflicts of interest present.

Loans applied for by individuals to fund the purchase of real estate. In comparison to commercial mortgages, residential mortgages are secured by the borrower’s main residence rather than business premises like office buildings and industrial properties.

A government-registered savings account for investing in a child’s post-secondary education. Contributions are not tax-deductible, but the investments grow tax-free. Withdrawals are taxed under the student, as they are typically at a lower tax rate due to having minimal income while attending post-secondary education.

A financial metric that measures a company’s efficiency of using shareholder funds to generate profit. It is computed by dividing the company’s net income by its shareholders’ equity.

A financial metric that measures the gain or loss from an investment against its cost.

The likelihood that the actual outcome may not match the expected outcome. This uncertainty is inherent in investing, due to changes in market volatility, company performance, and other economic conditions that may affect the performance of an investment.

The level of uncertainty an investor is willing and able to endure regarding the fluctuations in the value of their investments.

A measure of an investment’s return (or potential return) that takes into account the amount of risk undertaken to achieve the specific return. This metric allows investors to assess whether the returns compensate for the level of risk they are taking on.

A savings and investment account registered with the Canada Revenue Agency (CRA) and is designed primarily for retirement savings. Contributions are tax-deductible, lowering your taxable income, and investments grow tax-free until you withdraw them.

Another term for a financial asset such as debt securities (bank notes, bonds) and equity securities (stocks). The entity that issues these securities is called the issuer.

The completion of a purchase of bonds or shares. The settlement is done when the seller receives the payment of the sale, and the buyer receives the security.

A stake in a company that entitles the shareholder proportionate ownership to the company. It represents the actual units of ownership in a company.

The difference between two related quantities, such as stock prices, yields, or interest rates.

Equity instruments issued by a company to investors.

The process of investors purchasing a financial instrument that an issuer offers.

A government-registered savings account that allows individuals to save and earn tax-free investment income as well as tax-free withdrawals. TFSAs come with a contribution limit per year.

The duration of an investment.

A commission paid to brokers by mutual fund companies for advice provided to investors who hold their funds. At Amur Capital, 100% of the investor’s capital is placed directly on the funds with no trailer fees.

A short-term loan to the government.

A legal arrangement between a trustee and a beneficiary. The trustee holds the assets for the benefit of the beneficiary, following specific terms in the trust agreement.

A combination of assets packaged and sold as one. In mutual funds and ETFs, a unit is a single share or portion of ownership in the investment fund.

An investment strategy where investors actively pick stocks that appear undervalued by the market.

A form of private investing where investors provide funding to startups and early-stage emerging companies with high-growth potential in exchange for an ownership stake in the company.

The degree of variation of the price or value of an asset class in the market.

The rate of return on an investment, typically expressed as a percentage of the investment’s value over a set period of time.

The total anticipated return on a bond if it is held until it matures.