Active Share: The percentage of a fund’s portfolio that differs from the benchmark index.

Basis point (“BPS”): A unit of measure used to indicate percentage changes in financial instruments, making it possible to communicate small variations in financial variables.

Book value: The value of a company’s assets after netting out its liabilities. It approximates the total value shareholders would receive if the company were liquidated.

CAPE Ratio: Also known as the Shiller P/E or PE 10 Ratio, is an acronym for the Cyclically-Adjusted Price-to-Earnings Ratio. The ratio is calculated by dividing a company’s stock price by the average of the company’s earnings for the last ten years, adjusted for inflation.

CapEx: Capital expenditures (CapEx) are the funds companies allocate to acquire, upgrade, and maintain essential physical assets like property, technology, or equipment, crucial for expanding operational capacity and securing long-term economic benefits.

Dividends: The percentage of a company’s earnings that is paid to its shareholders as their share of the profits. Dividends are generally paid quarterly, with the amount decided by the board of directors based on the company’s most recent earnings.

Earnings yield: Refers to the earnings per share for the most recent 12-month period divided by the current market price per share. The earnings yield (the inverse of the P/E ratio) shows the percentage of a company’s earnings per share.

Earnings before interest and taxes (“EBIT”): A measure of a firm’s profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses.

EBITDA: Short for earnings before interest, taxes, depreciation, and amortization, is an alternate measure of profitability to net income.

Enterprise multiple: Also known as the EV multiple, is a ratio used to determine the value of a company. The enterprise multiple, which is enterprise value divided by earnings before interest, taxes, depreciation, and amortization (EBITDA), looks at a company the way a potential acquirer would by considering the company’s debt.

Enterprise Value (“EV”): The measure of a company’s total value. It looks at the entire market value rather than just the equity value, so all ownership interests and asset claims from both debt and equity are included.

Excess Return: Refers to the return from an investment above the benchmark.

Forward earnings: Forward earnings are an estimate of the next period’s earnings of a company, usually till the completion of the current fiscal year and sometimes to the following fiscal year.

Free cash flow (“FCF”): Represents the cash that a company generates after accounting for cash outflows to support its operations and maintain its capital assets.

Liquidation value: The net value of a company’s physical assets if it were to go out of business and the assets sold. The liquidation value is the value of company real estate, fixtures, equipment, and inventory. Intangible assets are excluded from a company’s liquidation value. Readily ascertainable NAV.

MSCI USA All Cap Index: The MSCI USA All Cap Index captures broad US equity coverage. The index includes 3,464 constituents across large, mid, small and micro capitalizations, representing about 99% of the US equity universe.  The index is not a security that can be purchased or sold.

MSCI USA Index: The MSCI USA Index is designed to measure the performance of the large and mid-cap segments of the US market. With 590 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in the U.S..

‍MSCI USA Small Cap Value Index: The MSCI USA Small Cap Value Index captures small cap securities exhibiting overall value style characteristics across the US equity markets.  The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield.  The index is not a security that can be purchased or sold.

MSCI World Value: The MSCI World Value Index captures large and mid-cap securities exhibiting overall value style characteristics across 23 Developed Markets (DM) countries. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. The index is not a security that can be purchased or sold.

Net asset value (“NAV”): The value of an investment fund that is determined by subtracting its liabilities from its assets.

Net cash: Refers to the position of a company with regard to its liquidity position. To calculate net cash, a company will need to deduct its current liabilities from its cash balance.  Liabilities are a business’ obligations to transfer assets or provide a service that’s already taken place.

Net debt-to-EBITDA (earnings before interest depreciation and amortization) ratio: A measurement of leverage, calculated as a company’s interest-bearing liabilities minus cash or cash equivalents, divided by its EBITDA.

Price to Book: Weighted harmonic average of the ratio of current share price to its book value per share of each security holding invested in the portfolio.

Price to Cash Flow: Weighted harmonic average of the ratio of current share price to its trailing 12-months cash flow per share of each security holding invested in the portfolio.

Price to Sales: Weighted harmonic average of the ratio of current share price to its trailing 12-months sales per share of each security holding invested in the portfolio.

Price-to-earnings ratio (“P/E Ratio”): The P/E ratio for valuing a company that measures its current share price relative to its per-share earnings.

Price-to-NAV: Price to Net Asset Value ratio (also known as price/book). The P/NAV ratio shows the company’s share price to the net asset (or book) value per share.

Price-to-value: The comparison between the amount a security can be purchased for relative to its perceived worth.

Return of capital (“ROC”):  A payment that an investor receives as a portion of their original investment and that is not considered income or capital gains from the investment. Note that a return of capital reduces an investor’s adjusted cost basis.

Return on assets (“ROA”): A financial ratio that indicates how profitable a company is relative to its total assets.

Return on equity (“ROE”): A measure of a company’s financial performance. It is calculated by dividing net income by shareholders’ equity.

Return on Investment (“ROI”): Expressed as a percentage, return on investment (ROI) is a financial ratio that measures the profit generated by an investment relative to its cost.

Russell 2000® Index: The Russell 2000® Index measures the performance of the small-cap segment of the US equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index which is designed to represent approximately 98% of the investable US equity market.

Russell Midcap Growth Index: The Russell Midcap® Growth Index measures the performance of the midcap growth segment of the US equity universe. It includes those Russell Midcap Index companies with relatively higher price-to-book ratios, higher I/B/E/S forecast medium term (2 year) growth and higher sales per share historical growth (5 years).

S&P 500 Index, or the Standard & Poor’s 500 Index: The S&P 500 Index is a market-capitalization-weighted index of the 500 largest publicly-traded companies in the U.S. It is not an exact list of the top 500 U.S. companies by market capitalization because there are other criteria to be included in the index. The index is not a security that can be purchased or sold.  

Share repurchase: A transaction whereby a company buys back its own shares from the marketplace.

Sharpe Ratio: The difference between the returns of the investment and the risk-free return divided by the standard deviation of the investment returns. It represents the additional return an investor receives per unit of increased risk.

Standard Deviation: Standard deviation is a statistical measurement that looks at how far discrete points in a dataset are dispersed from the mean of that set. It is calculated as the square root of the variance.