A gauge of risk-adjusted outperformance relative to a benchmark.
Measures the volatility of a security or portfolio in relation to the market, usually as measured by the S&P 500 Index. A beta of 1 indicates the security will move with the market. A beta of 1.3 means the security is expected to be 30% more volatile than the market, while a beta of 0.8 means the security is expected to be 20% less volatile than the market.
Bloomberg Barclays U.S. High Yield Corporate Bond Index
An index that covers the universe of fixed rate, non-investment grade debt. Eurobonds and debt issues from countries designated as emerging markets (sovereign rating of Baa1/BBB+/BBB+ and below using the middle of Moody’s, S&P, and Fitch) are excluded, but Canadian and global bonds (SEC registered) of issuers in non-EMG countries are included. The index includes both corporate and non-corporate sectors.
The historical tendency of two investments to move together. Investors often combine investments with low correlations to diversify portfolios.
Stands for the Committee on Uniform Securities Identification Procedures. Formed in 1962, this committee developed a system that identifies securities, specifically U.S. and Canadian registered stocks, U.S. government and municipal bonds, exchange-traded funds and mutual funds.
High Yield Bond, or Junk Bond
A high paying bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds, and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds.
ICE BofAML US High Yield Index
The index tracks the performance of below-investment-grade US dollar-denominated corporate bonds publicly issued in the US domestic market.