Glossary

Active Share is a measure of the percentage of stock holdings in a manager's portfolio that differs from the benchmark index.

Alpha is a term used in investing to describe an investment strategy’s ability to beat the market, or its “edge”.  Alpha is thus often referred to as “excess return” or the “abnormal rate of return” in relation to a benchmark, when adjusted for risk. 

A basis point (bp) equals 1/100 of a percentage point. 1 bp = 0.01%, 100 bps = 1%.

Book Value (BV) is the net asset value of a company, calculated by total assets minus intangible assets and liabilities.

Cash flow is the net amount of cash and cash equivalents being transferred into and out of a business. 

Discounted Cash Flow (DCF) is a valuation method that estimates the value of an investment using its expected future cash flows.

Discounted Rate is the interest rate used to calculate the present value of future cash flows from a project or investment.

Dividend yield expressed as a percentage, is a financial ratio (dividend/price) that shows how much a company pays out in dividends each year relative to its stock price.

Earnings long-term future growth rate is the earnings long-term secular growth rate for a period of three to five years per fund holdings; this figure is not a reflection of the Fund's performance.

Earnings per share (EPS) is a financial measure which indicates the profitability of a company. It is calculated by dividing the company’s net income by its total number of outstanding shares.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a measure of core corporate profitability. EBITDA is calculated by adding interest, tax, depreciation, and amortization expenses to net income.

ERCOT is an acronym for the Electric Reliability Council of Texas.  It manages the flow of electric power to more than 26 million customers in Texas and represents about 90% of the state’s electric load.

An expense ratio measures how much of a fund's assets are used for administrative and other operating expenses. An expense ratio is determined by dividing a fund's operating expenses by the average dollar value of its assets.

Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base.

Free cash flow multiples compare a company's cash flow (such as operating cash flow or free cash flow) to its market value. 

Free cash flow yield is a financial solvency ratio that compares the free cash flow per share a company is expected to earn against its market value per share. The ratio is calculated by taking the free cash flow per share divided by the current share price. 

Growth at a reasonable price (GARP) is an equity investment strategy that combines growth and value investing attributes. GARP investors focus on companies with earnings growth above broad market levels but without extremely high valuations.

A leveraged buyout (LBO) is the acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of the acquisition.

Magnificent Seven are 7 technology stocks that drove a large portion of the market's returns in 2023 and 2024.  The list includes Apple, Microsoft, Amazon, Alphabet (Google), Tesla, Nvidia, and Meta Platforms.

Market capitalization is the number of a company's outstanding shares multiplied by the price of one share.

The MSCI World Index is a broad global equity index that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI world index does not offer exposure to emerging markets.

The NASDAQ Composite Index is an index of more than 3,700 stocks, weighted by market capitalization. The technology sector accounts for just over half the index, more than three times the index weight of any other market sector.

Near shoring is a strategy in which a company moves all or part of its production closer to the final consumer, reducing costs and avoiding logistical setbacks. 

Net Asset Value (NAV) represents the net value of a fund's assets on a per-share basis.

Onshoring is a business strategy that involves setting up production within national borders. It involves keeping production or operational processes in the same country where the products are consumed or services are provided, regardless of the country's location.

Pennsylvania-New Jersey-Maryland Interconnection (PJM) is a regional transmission organization that coordinates the movement of wholesale electricity in all of parts of 13 states and the District of Columbia.

The price-to-book ratio (PB) is a ratio used to compare a company's current market value to its book value.  It's calculated by dividing the company's stock price per share by its book value per share (BVPS).

The price-to-cash flow (P/CF) ratio is a stock valuation indicator or multiple that measures the value of a stock’s price relative to its operating cash flow per share.

The price-to-earnings ratio (P/E) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). 

The price-to-earnings ratio (P/E) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). 

R&D stands for research and development.  It is the process of creating new products, services or processes through systematic investigation and innovation.

Return on equity (ROE) is the measure of a company’s net income divided by its shareholders’ equity.  ROE is a gauge of a corporation’s profitability and how efficiently it generates those profits.

Return on invested capital (ROIC) is a calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. 

The Russell 2000® Index is a market index comprised of 2,000 small-cap companies. The index is frequently used as a benchmark for measuring the performance of small-cap mutual funds.

The Russell 1000® Growth Index measures the performance of the large- cap growth segment of the US equity universe. It includes those Russell 1000 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).

The Russell 1000® Value Index consists of stocks in the Russell 1000 Index with lower price-to-book (P/B) ratios and lower forecasted growth values.

The S&P 500® Index is a broad-based, unmanaged measurement of changes in stock market conditions based on the average of 500 widely held common stocks.

The S&P 500® Equal Weight Index (EWI) is the equal-weight version of the widely-used S&P 500. The index includes the same constituents as the capitalization weighted S&P 500, but each company in the S&P 500 EWI is allocated a fixed weight - or 0.2% of the index total at each quarterly rebalance.

The S&P 500® Health Care Services Sector comprises those companies included in the S&P 500 that are classified as members of the GICS® health care sector.

The Weighted Average Market Capitalization is a type of market index in which each component is weighted according to the size of its total market capitalization.  Market capitalization is the sum of the total value of a company's outstanding shares multiplied by the price of one share.