Past performance does not predict future returns.

Absolute return investing: A type of investment strategy that seeks to generate a positive return over time, regardless of market conditions or the direction of financial markets, typically with a low level of volatility.

Bonds/bond markets: A bond is a debt security issued by a company or a government, where the investor buying the bond is effectively lending money to the issuer of the bond. Bonds offer a return in the form of fixed periodic payments (a ‘coupon’), and the eventual return at maturity of the original amount invested – the par value. There is a large market for bonds in their varying forms.

Bull market/bull run: A market where stocks are rising in value, encouraging investors to buy into the market, potentially leading to further market gains.

Cash flow: The movement of cash in and out of a business from its activities and expenditure.

Dispersion/stock dispersion: The range of returns for a group of stocks. Higher dispersion is generally considered to be a better environment for investors focused on stock selection, given the greater potential to differentiate performance from any particular benchmark.

Distressed balance sheets: The balance sheet is the financial statement that summarises a company’s assets, liabilities and shareholders’ equity at a particular point in time. Each segment gives investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. A distressed balance sheet is one where income or revenues are not sufficient to cover costs or debts.

Equity long/short: An equity portfolio that can invest in both long and short positions. The intention is to profit from combining long positions in assets in the expectation that they will rise in value, with short positions in assets expected to fall in value. This type of investment strategy has the potential to generate returns regardless of moves in the wider market, although returns are not guaranteed.

Financing rates: The cost of borrowing money.

Inflation: The rate at which the prices of goods and services are rising in an economy. The Consumer Price Index (CPI) and Retail Price Index (RPI) are two common measures.

Leverage: The use of borrowing to increase exposure to an asset/market. This can be done by borrowing cash and using it to buy an asset, or by using financial instruments such as derivatives to simulate the effect of borrowing for further investment in assets.

Liquid alternatives: Alternatives are investments that are not included among the traditional asset classes of equities, bonds or cash, such as property or infrastructure, hedge funds, commodities, private equity, art, derivatives, or cryptocurrencies. Liquid assets are those that can be easily traded in the market in high volumes, without causing a major price move.

Long book: The part of a long/short investment strategy that deals with assets that are bought with the intention of holding over a long period, in the expectation they will rise in value.

Long investing (long position): A security that is bought with the intention of holding over a long period, in the expectation that it will rise in value.

Macroeconomic risk: Large-scale political or economic hazards that can adversely or favourably affect the performance of investments.

Monetary policy: The policies of a central bank, aimed at influencing the level of inflation and growth in an economy. Monetary policy tools include setting interest rates and controlling the supply of money. Monetary stimulus refers to a central bank increasing the supply of money and lowering borrowing costs. Monetary tightening refers to central bank activity aimed at curbing inflation and slowing down growth in the economy by raising interest rates and reducing the supply of money.

Share price: The price to purchase (or sell) one share in a company, not including fees or taxes.

Short book: The part of a long/short investment strategy that deals with assets that are bought in the expectation that they will fall in value, with the intention of buying them back for less when the price falls.

Short investing (short position/shorting): Fund managers use this technique to borrow then sell what they believe are overvalued assets, with the intention of buying them back for less when the price falls. The position profits if the security falls in value. Within UCITS funds, derivatives – such as CFDs – can be used to simulate a short position.

Treasuries/US Treasury securities: Debt obligations issued by the US government. With government bonds, the investor is a creditor of the government. Treasury Bills and US Government Bonds are guaranteed by the full faith and credit of the United States government. They are generally considered to be free of credit risk and typically carry lower yields than other securities.

Yield: The level of income on a security over a set period, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.