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A

Active Share – A measure of the percentage of stock holdings in a manager's portfolio that differ from the benchmark index.

ADR – An American Depositary Receipt (ADR) is a stock representing a specified number of shares in a foreign corporation. ADRs are bought and sold in the American markets just like regular stocks. An ADR is issued by a U.S. Bank, consisting of a bundle of shares of a foreign corporation that are being held in custody overseas. The foreign entity must provide financial information to the sponsor bank. ADRs do not eliminate the currency and economic risks for the underlying shares in another country. ADRs are listed on either the NYSE, AMEX, or NASDAQ.

Alpha – A measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk as measured by beta. A positive alpha figure indicates the portfolio performed better than its beta would predict. In contrast, a negative alpha indicates under-performance, given the expectations established by the beta.

Alternative Minimum Tax (AMT) – A federal tax aimed at ensuring that high-income individuals, estates, trusts, and corporations pay a minimal level income tax. For individuals, the AMT is calculated by adding tax preference items to regular taxable income.

AMAR – Audit of Minimum Assessing Requirements.

Annualized Distribution Yield – The distribution yield reflects actual distributions made to shareholders. The Annualized distribution yield is calculated by summing the last 30 days of income at a given month end and annualizing to a 360-day year. The result is divided by the ending maximum offering price or net asset value.

Asset-backed Security (ABS) – A security whose value and income payments are derived from and collateralized (or "backed") by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets that are unable to be sold individually. Pooling the assets into financial instruments allows them to be sold to general investors, a process called securitization, and allows the risk of investing in the underlying assets to be diversified because each security will represent a fraction of the total value of the diverse pool of underlying assets.

Average Effective Maturity – Weighted average of the effective maturities of the bonds in a portfolio. Effective maturity incorporates the embedded option features of the bond, such as prepayments, call and put options.

B

Basel III – A set of standards and practices developed by the Basel Committee on Banking Supervision to ensure that international banks maintain adequate capital during periods of economic strain.

Basel III CET1 – A comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The common equity tier 1 (CET1) ratio is a measurement of a bank’s core equity capital compared with its total risk-weighted assets, and it excludes any preferred shares or non-controlling interests when determining the calculation.

Basis Point (bp) – A unit equal to 1/100th of 1%. 1% = 100 basis points (bps).

Batting Average – A measure of a manager's record of consistently beating the fund's benchmark. It is calculated by dividing the number of periods in which the manager's portfolio has beaten its index by the total number of periods within a given time horizon. For example, a portfolio that meets or outperforms its benchmark every period over a given amount of time would have a batting average of 100%, while a portfolio that beats the index half of the time would yield a 50% batting average.

Beta – A measure of market-related risk. Less than one means the portfolio is less volatile than the index, while greater than one indicates more volatility than the index.

The Big Mac Index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between nations, using the price of a Big Mac as the benchmark.

The Bloomberg Barclays 5-Year Municipal Bond Index covers USD-denominated, investment-grade, tax-exempt bonds with maturities between four and six years. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds.

The Bloomberg Barclays Agency Mortgage-backed Securities (MBS) Index is the U.S. MBS component of the U.S. Aggregate Index.

The Bloomberg Barclays Asset-backed Securities (ABS) Index is the ABS component of the U.S. Aggregate index.

The Bloomberg Barclays Commercial Mortgage-backed Securities (CMBS) Index is the CMBS component of the U.S. Aggregate Index.

The Bloomberg Barclays Emerging Markets U.S. Aggregate Bond Index is a hard currency emerging markets debt benchmark that includes fixed and floating-rate U.S. dollar-denominated debt issued from sovereign, quasi-sovereign, and corporate EM issuers.

The Bloomberg Barclays Intermediate Government Bond Index is an unmanaged, market-weighted index generally representative of all public obligations of the U.S. Government, its agencies and instrumentalities having maturities from one up to ten years.

The Bloomberg Barclays Intermediate Government/Credit Bond Index is an unmanaged, market-weighted index generally representative of intermediate government and investment-grade corporate debt securities having maturities from one up to ten years.

The Bloomberg Barclays Intermediate U.S. Treasury Index includes all publicly issued, U.S. Treasury securities that have a remaining maturity of greater than or equal to 1 year and less than 10 years, are rated investment grade, and have $250 million or more of outstanding face value.

The Bloomberg Barclays Municipal Index covers the USD-denominated, investment-grade, long-term, tax-exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds.

The Bloomberg Barclays U.S. 1-3 Yr Aggregate Bond Index measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market with maturities between 1 and 3 years, including Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS.

The Bloomberg Barclays U.S. Aggregate Bond Index is composed of approximately 8,000 publicly traded bonds including U.S. government, mortgage-backed, corporate and Yankee bonds. The index is weighted by the market value of the bonds included in the index.

The Bloomberg Barclays U.S. Corporate Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by U.S. and non-U.S. industrial, utility, and financial issuers that meet specified maturity, liquidity, and quality requirements.

The Bloomberg Barclays U.S. Corporate High-Yield Index measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging market debt.

The Bloomberg Barclays U.S. Corporate Investment Grade Index is publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SEC-registered.

The Bloomberg Barclays U.S. Credit Index is composed of the U.S. Corporate Index and a non-corporate component that includes foreign agencies, sovereigns, supranationals and local authorities. The U.S. Credit Index is a subset of the U.S. Government/Credit Index and the U.S. Aggregate Index.

The Bloomberg Barclays U.S. High Yield Bond Index covers the universe of fixed-rate, non-investment grade debt.

The Bloomberg Barclays U.S. Government Index is composed of securities issued by the U.S. Government (i.e., securities in the Treasury and Agency Indices).

The Bloomberg Barclays US Universal Bond Index represents the union of the U.S. Aggregate Index, U.S. Corporate High-Yield, Investment Grade 144A Index, Eurodollar Index, U.S. Emerging Markets Index, and the non-ERISA eligible portion of the CMBS Index. The index covers USD denominated, taxable bonds that are rated either investment-grade or below investment-grade.

The BofA Merrill Lynch 1-3 Year Municipal Securities Index is a subset of the BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity less than 3 years.

The BofA Merrill Lynch 1-10 Year Municipal Securities Index is a subset of the BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity less than 10 years.

The BofA Merrill Lynch 1-12 Year Municipal Securities Index is a subset of the BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity less than 12 years.

The BofA Merrill Lynch 3-15 Year U.S. Municipal Securities Index is a subset of the BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity greater than or equal to 3 years and less than 15 years.

The BofA Merrill Lynch 12-22 Year U.S. Municipal Securities Index is a subset of the BofA Merrill Lynch U.S. Municipal Securities Index including all securities with a remaining term to final maturity greater than or equal to 12 years and less than 22 years.

The BofA Merrill Lynch 22+ Year US Municipal Securities Index is a subset of The BofA Merrill Lynch US Municipal Securities Index including all securities with a remaining term to final maturity greater than or equal to 22 years.

BofA Merrill Lynch High Yield Index tracks the performance of below investment grade, but not in default, US dollar denominated corporate bonds publicly issued in the US domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody’s and S&P.

The BofA Merrill Lynch Municipal Master Index tracks the performance of the investment-grade U.S. tax-exempt bond market. Qualifying bonds must have at least one year remaining term to maturity, a fixed coupon schedule, and an investment grade rating (based on average of Moody’s, S&P, and Fitch).

Book Value – The value of a security or asset as entered in a company's books.

A bond credit rating assesses the financial ability of a debt issuer to make timely payments of principal and interest. Ratings of AAA (the highest), AA, A, and BBB are investment-grade quality. Ratings of BB, B, CCC, CC, C and D (the lowest) are considered below investment grade, speculative grade, or junk bonds.

The Brazil Bovespa Index tracks around 50 stocks traded on the São Paulo Stock, Mercantile & Futures Exchange. The term Bovespa is derived from Bolsa de Valores do Estado de São Paulo, the Portugese name for the exchange.

Brent Crude Oil – A major trading classification of sweet light crude oil that serves as a benchmark price for purchases of oil worldwide.

The NYSE Arca Biotechnology Index (BTK) is an equal-dollar-weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.

Build America Bonds – Taxable bonds issued by state and local governments. The U.S. Treasury then provides these entities with a direct federal subsidy for a portion of the borrowing costs.

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C

CapEx – Capital expenditures are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.

Carry Trade – A strategy in which an investor sells a certain financial instrument with a relatively low interest rate and uses the funds to purchase a different financial instrument yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used.

COFINA - Puerto Rico Sales Tax Financing Corporation

Collateralized Debt Obligation (CDO) – An investment-grade security backed by a pool of bonds, loans and other assets. CDOs do not specialize in one type of debt but are often non-mortgage loans or bonds.

Collateralized Mortgage Obligation (CMO) – A type of mortgage-backed security that creates separate pools of pass-through rates for different classes of bondholders with varying maturities, called tranches. The repayments from the pool of pass-through securities are used to retire the bonds in the order specified by the bonds’ prospectus.

Commercial Paper – Unsecured, short-term debt instrument issued by large corporations, typically for the financing of accounts receivable, inventories, and other short-term liabilities.

Compound Annual Growth Rate (CAGR) – The year-over-year growth rate of an investment over a specified period of time. It describes the rate at which an investment would have grown if it grew at a steady rate.

Consumer Price Index (CPI) – Index that measures prices of a fixed basket of goods bought by a typical consumer, including food, transportation, shelter, utilities, clothing, medical care, entertainment and other items. The CPI, published by the Bureau of Labor Statistics in the Department of Labor, is based at 100 in 1982 and is released monthly. It is widely used as a cost-of-living benchmark to adjust Social Security payments and other payment schedules, union contracts and tax brackets. Also known as the cost-of-living index.

Core Personal Consumption Expenditure Index is a measure of the Personal Consumption Expenditure Index that excludes the more volatile and seasonal food and energy prices.

Correlation – Measurement of the degree to which two variables move together. A correlation coefficient of 1 (the highest) would indicate the returns of the mutual funds and/or indices move in the same direction to equal degrees. A correlation of 0 indicates that there is no relationship between returns. And a correlation of -1 (the lowest) would indicate the performance moved in opposite directions by equal amounts.

Cov-lite (Covenant Light) – Loan agreements which do not contain the usual protective covenants for the benefit of the lending party.

Coverage Ratio – Cash available to pay debt divided by interest and principal.

Credit Curve – The spread over treasuries of various maturities for a single bond issuer.

A bond credit rating assesses the financial ability of a debt issuer to make timely payments of principal and interest. Ratings of AAA (the highest), AA, A, and BBB are investment-grade quality. Ratings of BB, B, CCC, CC, C and D (the lowest) are considered below investment grade, speculative grade, or junk bonds.

Credit Risk – The risk of loss due to a debtor's non-payment of a loan or other line of credit (either the principal or interest (coupon) or both).

Credit Spectrum – Refers to the range of credit quality ratings, from below investment grade to the highest quality.

Credit Spread/Quality Spread – The difference between the yields of securities with different credit qualities.

Current Account – The sum of the balance of trade (goods and services exports less imports), net income from abroad and net current transfers.

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D

Daily Floater – A variable rate demand note (VRDN) or other floating-rate security with a coupon rate that adjusts daily.

Derivative – A security whose price is dependent upon or derived from one or more underlying assets.

Dividend Payout Ratio – The percentage of earnings paid to shareholders in dividends calculated as yearly dividend per share over earnings per share.

Dividend Yield – A ratio that shows how much a company pays out in dividends each year relative to its share price.

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 actively traded “blue chip” stocks, primarily industrials, but includes financials and other service-oriented companies. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks.

Dubai Financial Market General Index is a capitalization weighted price index comprising stocks of listed companies, whose primary listings debuted on DFM on or after January 1, 2004.

Duration – A bond’s sensitivity to interest rates. Bonds with longer durations experience greater price volatility than bonds with shorter durations.

E

Earnings per Share (EPS) – The total earnings divided by the number of shares outstanding.

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization. An approximate measure of a company's operating cash flow based on data from the company's income statement.

Effective Duration – A bond’s sensitivity to interest rates, incorporating the embedded option features, such as call provisions. Bonds with longer durations experience greater price volatility than bonds with shorter durations.

Emerging Markets (EM) – Nations whose economy is progressing toward becoming advanced, as shown by some liquidity in local debt and equity markets and the existence of some form of market exchange and regulatory body. Emerging markets generally do not have the level of market efficiency and strict standards in accounting and securities regulation to be on par with advanced economies (such as the United States, Europe and Japan), but emerging markets will typically have a physical financial infrastructure including banks, a stock exchange and a unified currency.

Enterprise Value (EV) – A measure of a company's total value, including market capitalization, total debt, minority interest, and preferred shares, minus cash and cash equivalents.

The EURO STOXX 50 Index, Europe's leading Blue-chip index for the Eurozone, provides a Blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 12 countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

Exchange Traded Fund (ETF) – A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

Expense Ratios – Expressed as a percentage of total fund assets and include management fees and operating costs. Expense ratios fluctuate over time and the expense ratio in the prospectus may differ from the actual expense ratio. The fund's total return includes the deduction of expenses.

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F

Fed Funds Rate – The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.

The FlNRA-Bloomberg Active Investment Grade U.S. Corporate Bond Index is comprised of the "active" (most frequently traded) fixed-coupon, investment-grade bonds represented by FINRA TRACE, FINRA's transaction reporting facility that disseminates all over-the-counter secondary market transactions in these public bonds.

The FlNRA-Bloomberg Active High Yield U.S. Corporate Bond Index is comprised of the "active" (most frequently traded) fixed-coupon, high-yield bonds represented by FINRA TRACE, FINRA's transaction reporting facility that disseminates all over-the-counter secondary market transactions in these public bonds.

The FINRA/Bloomberg Active U.S. Corporate Bond Indexes are comprised of the “active” (most frequently traded) fixed-coupon bonds represented by FINRA’s transaction reporting facility that disseminates all over-the-counter secondary market transactions in these public bonds.

Floating-Rate Securities (Floater) – Debt instrument whose coupon rate adjusts with short-term interest rate changes.

Free-Cash-Flow Yield – An overall return evaluation ratio of a stock, which standardizes the free cash flow per share a company is expected to earn against its market price per share. The ratio is calculated by taking the free cash flow per share divided by the share price.

The FTSE 100 Index tracks the 100 publicly-traded companies listed on the London Stock Exchange with the highest market capitalization.

G, H

General Obligation Bond (GO) – A municipal bond backed by the credit and “taxing power” of the issuing jurisdiction rather than the revenue from a given project.

Gilts – Bonds that are issued by the British government. Generally considered low-risk investments, Gilts are the U.K. equivalent of U.S. Treasury securities.

Gross Domestic Product (GDP) – A country's income minus foreign investments: the total value of all goods and services produced within a country in a year, minus net income from investments in other countries.

Gross merchandise volume (GMV) – A term used in online retailing to indicate a total sales dollar value for merchandise sold through a particular marketplace over a certain time frame.

The Hang Seng Index is a free-float adjusted, market-capitalization weighted stock market index in Hong Kong. It tracks the performance of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong.

I, J, K

International Monetary Fund (IMF) – An organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Information Ratio – A measure of the consistency of excess returns over the benchmark. It is the excess return divided by the tracking error (or standard deviation of excess return). The higher the information ratio, the higher the expected return of the portfolio given the amount of risk taken.

Insured Bonds – Individual bonds are sometimes insured by private companies. The insurance guarantees the payment of principal and interest on a bond issue if the issuer defaults. Mutual funds are not insured, even if the underlying bonds are insured.

Intrinsic value – Reflects Thornburg's estimate of a company’s value, encompassing our collective investment judgment.

Japan's Nikkei 225 Stock Average is the leading index of Japanese stocks. It is a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange.

Japanese Government Bond (JGP) – A bond issued by the government of Japan.

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L

Laddering involves building a portfolio of bonds with staggered maturities so that a portion matures each year. Money that comes in from maturing bonds is typically invested in bonds with longer maturities at the far end of the portfolio.

Leverage – The amount of debt used to finance a firm’s assets. A firm with significantly more debt than equity is considered to be highly leveraged.

Libor (London Inter-Bank Offer Rate) – The benchmark rate that some of the world’s leading banks charge each other for short-term loans.

Loan Participation Note – A fixed-income security that permits investors to buy portions of an outstanding loan or package of loans.

M

Master Limited Partnership (MLP) – A type of limited partnership that is publicly traded.

MBIA, Inc. is a financial services company founded in 1973 as the Municipal Bond Insurance Association. MBIA Insurance Corp.’s primary business was to provide financial guarantee insurance to the United States’ public finance markets.

Mortgage-backed Security – A type of asset-backed security that is secured by a mortgage or collection of mortgages. These securities must be grouped in one of the top two ratings as determined by a accredited credit rating agency and usually pay periodic payments that are similar to coupon payments. The mortgage must have originated from a regulated and authorized financial institution.

Mortgage Pass-Through – A security consisting of a pool of residential mortgage loans. Payments of principal, interest and prepayments are “passed through” to investors each month.

The MSCI All Country (AC) World Index is a market capitalization weighted index that is representative of the market structure of 46 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim. The index is calculated with net dividends reinvested in U.S. dollars.

The MSCI All Country (AC) World ex-US Index is a market capitalization weighted index representative of the market structure of 45 developed and emerging market countries in North and South America, Europe, Africa, and the Pacific Rim, excluding securities of United States’ issuers. The index is calculated with gross dividends reinvested in U.S. dollars.

The MSCI BRIC Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the following four emerging market country indices: Brazil, Russia, India and China.

The MSCI China H Shares Index reflects the performance of China’s H shares, which are securities of companies incorporated in the People's Republic of China (PRC) and nominated by the Chinese Government for listing and trading on the Hong Kong Stock Exchange.

The MSCI country indices are free float-adjusted market capitalization indices that are designed to measure equity market performance in that specific country in U.S. dollars.

The MSCI EAFE (Europe, Australasia, Far East) Index is an unmanaged index. It is a generally accepted benchmark for major overseas markets. Index weightings represent the relative capitalizations of the major overseas developed markets on a U.S. dollar adjusted basis. The index is calculated with net dividends reinvested in U.S. dollars.

The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 23 emerging market country indexes: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI Emerging Markets (EM) Currency Index tracks the performance of 25 emerging-market currencies relative to the U.S. Dollar.

The MSCI Europe ex-U.K. Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe. The MSCI Europe Index consists of the following 14 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, and Switzerland.

The MSCI Nordic Countries Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the Nordic region. The index consists of the following 4 developed market country indices: Denmark, Finland, Norway, Sweden.

The MSCI World Index is an unmanaged market-weighted index that consists of securities traded in 23 of the world’s most developed countries. Securities are listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand, and the Far East. The index is calculated with net dividends reinvested in U.S. dollars.

Multiple – A valuation multiple reflects an investment’s market value relative to some key metric. Price to earnings ratio (P/E) is a commonly used multiple. It’s calculated by dividing a stock’s price by the company’s earnings per share.

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N

The NASDAQ Composite Index is a market value-weighted, technology-oriented index composed of approximately 5,000 domestic and non-US-based securities.

Data quoted at Net Asset Value (NAV) does not reflect the deduction of the Fund’s maximum sales charge.

The NFIB Small Business Optimism Index is a composite of 10 seasonally adjusted components calculated from answers to a survey conducted each month by the National Federation of Independent Business of its members.

The NYSE Arca Biotechnology Index (BTK) is an equal-dollar-weighted index designed to measure the performance of a cross section of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services.

O

Operation Twist – A monetary process where, in an attempt to lower long-term interest rates, the Fed sold short-term Treasury bonds and bought long-term Treasury bonds, which pressured the long-term bond yields downward.

OAS (Option Adjusted Spread) – The flat spread over the treasury yield curve required to discount a security payment to match its market price.

P

The Personal Consumption Expenditure (PCE) Price Index is one measure of U.S. inflation that assesses the percentage change in prices of goods and services purchased by consumers throughout the economy. Of all the measures of consumer price inflation, the PCE price index covers the broadest set of goods and services.

PRASA - Puerto Rico Aqueduct and Sewer Authority

PREPA - Puerto Rico Electric Power Authority

Price/Book ratio (P/B ratio) – A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.

Price/Cash Flow – The measure of the market's expectations regarding a firm's future financial health. It is calculated by dividing price per share by cash flow per share.

P/E – Price/Earnings ratio (P/E ratio) is a valuation ratio of a company’s current share price compared to its per-share earnings. P/E equals a company’s market value per share divided by earnings per share. Forecasted P/E is not intended to be a forecast of the fund's future performance.

Put – A contract giving the owner the right to sell a specified asset at a set price within a specified time.

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Q

Quantitative Easing (QE) – An unconventional monetary policy in which a central bank purchases financial assets from the market in order to lower interest rates and increase the money supply.

QE2 or Quantitative Easing 2 – The second round of the Federal Reserve’s monetary policy used to stimulate the U.S. economy following the recession that began in 2007/08. QE2 was initiated in the fourth quarter of 2010 in order to jump-start the sluggish economic recovery.

R

R Squared – A statistical measure that represents the percentage of a fund's or security's movements that are explained by movements in a benchmark index. For fixed-income securities the benchmark is the T-bill, and for equities the benchmark is the S&P 500.

Real Yield – Yield from an investment adjusted for the effects of inflation.

REITs – Securities that sell like a stock on the major exchanges and invest in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields as well as a highly liquid method of investing in real estate.

Return On Equity – A measure of a corporation's profitability. The ROE is useful in comparing the profitability of a company to other firms in the same industry.

Revenue Bond – A bond on which the debt service is payable solely from the revenue generated from the operation of the project being financed or a category of facilities, or from other non-tax sources.

Riskless (or risk-free) Interest Rate – The theoretical rate of return of an investment with zero risk. The risk-free rate represents the interest that an investor would expect from an absolutely risk-free investment over a given period of time. Though a truly risk-free asset exists only in theory, in practice most professionals and academics use short-dated government bonds, such as a three-month U.S. Treasury bill.

Rolling Returns – Rolling returns display returns in overlapping cycles. For example, three-year rolling returns may look at the returns from February 1, 2002 to January 31, 2005, March 1, 2002 to February 28, 2005, April 1, 2002 to March 31, 2005, etc. Rolling returns are useful for examining the behavior of returns for holding periods similar to those actually experienced by investors. 

The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It is a subset of the Russell 3000 Index and includes approximately 1,000 of the largest securities based on a combination of their market cap and current index membership.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the large-cap growth segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect growth characteristics.

The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher price-to-value ratios and higher forecasted growth values. The Russell 2000 Growth Index is constructed to provide a comprehensive and unbiased barometer for the small-cap growth segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect growth characteristics.

The Russell 3000 Growth Index is an unmanaged index comprised of those Russell 3000 companies with higher price-to-book ratios and higher forecasted growth values. The stocks in this index are also members of either the Russell 1000 Growth or the Russell 2000 Growth indices.

The Russell 3000 Value Index measures the performance of the broad value segment of U.S. equity value universe. It includes those Russell 3000 companies with lower price-to-book ratios and lower forecasted growth values.

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S

The S&P 500 Dividend Aristocrats Index is equally weighted and measures the performance of large cap, blue chip companies within the S&P 500 Index that have followed a policy of increasing dividends every year for at least 25 consecutive years.

The S&P 500 Health Care Index is composed of those companies included in the S&P 500 Index that are classified as members of the health care sector as per the Global Industry Classification Standard.

The S&P 500 Index is an unmanaged broad measure of the U.S. stock market.

The S&P Biotechnology Select Industry Index represents the biotechnology sub-industry portion of the S&P Total Markets Index, as per the Global Industry Classification Standard.

S&P MidCap 400 Index is designed to measure the performance of 400 mid-sized companies in the U.S., reflecting this market segment’s distinctive risk and return characteristics. To be included in the index, a stock must have an unadjusted market capitalization that ranges from $1.4 billion to $5.9 billion.

The S&P Pharmaceuticals Select Industry Index represents the pharmaceuticals sub-industry portion of the S&P Total Markets Index, as per the Global Industry Classification Standard.

S&P BSE Sensex Index - India's most tracked bellwether index. It is designed to measure the performance of the 30 largest, most liquid and financially sound companies across key sectors of the Indian economy that are listed on the Bombay Stock Exchange (BSE).

S&P SmallCap 600 Index is designed to measure the performance of 600 small-size companies in the U.S., reflecting this market segment’s distinctive risk and return characteristics. To be included in the index, a stock must have an unadjusted market capitalization that ranges from $400 million to $1.8 billion.

SEC Yield – A yield computed in accordance with SEC standards measuring the net investment income per share over a specified 30-day period expressed as a percentage of the maximum offering price of the Fund’s shares at the end of the period.

The Shanghai Composite Index is a capitalization-weighted index that tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange.

Sharpe Ratio – A risk-adjusted measure developed by Nobel Laureate William Sharpe. It is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe Ratio, the better the fund’s historical risk-adjusted performance. The Geometric Sharpe ratio is calculated for the past three-year period by dividing a fund’s annualized excess returns by its annualized standard deviation.

The Shenzhen Composite Index is a market-cap weighted index that tracks the stock performance of all the A-share and B-share lists on the Shenzhen Stock Exchange.

Sovereign Debt – Government debt that has been issued in a foreign currency.

Spread Product – A term for taxable bonds that are not Treasury securities. Agency securities, asset-backed securities, corporate bonds, high-yield bonds, and mortgage-backed securities are various types of spread product.

Standard Deviation – A measurement of dispersion around an average which, for a mutual fund, depicts how widely the returns varied over a certain time period. Higher standard deviation of returns indicates greater volatility.

Swap Product – A derivative contract between parties to swap one risk exposure for another.

T

Take Rate – In online retailing, take rate refers to the number of people who have accepted an offer of a product or service over the number of contacts that have been made for that product or service: number of accepted offers/number of contacts.

Taylor Rule – A monetary-policy formula that provides an indication of how much the central bank would or should change the nominal interest rate in response to divergences of actual inflation rates from target inflation rates and of actual Gross Domestic Product (GDP) from potential GDP. It was first proposed by the U.S. economist John B. Taylor in 1993. The Federal Reserve Board may not use the Taylor Rule in setting monetary policy.

Tier 1 Capital – The core measure of a bank's financial strength. It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings), but may also include non-redeemable non-cumulative preferred stock.

TIPS (Treasury Inflation Protected Securities) – A U.S. Treasury note or bond that offers protection from the effects of inflation. Using the Consumer Price Index as a guide, the value of the principal is adjusted to reflect the effects of inflation. A fixed interest rate is paid semi-annually on the adjusted amount. At maturity, if inflation has increased the value of the principal, the investor receives the higher value. If deflation has decreased the value, the investor receives the original face amount of the security.

Tracking Error – A measure of how closely a portfolio follows its benchmark. Typically, it's the standard deviation of the difference in returns between a portfolio and the benchmark. Actively managed portfolios tend to have a higher tracking error compared to passively managed investments.

The trade-weighted U.S. dollar index, also known as the broad index, is a measure of the value of the United States dollar relative to other world currencies. Its numerical value is determined as a weighted average of the price of various currencies relative to the dollar.

Tranche – A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

U, V

The University of Michigan Consumer Sentiment Index rates the relative level of current and future economic conditions, based on a survey of about 500 consumers published monthly.

U.S. Person includes any "U.S. Person" as set forth in Regulation S promulgated under the Securities Act of 1933, as amended. Regulation S currently provides that: "U.S. person" means: (1) any natural person resident in the United States; (2) any partnership or corporation organized or incorporated under the laws of the United States; (3) any estate of which any executor or administrator is a U.S. person; (4) any trust of which any trustee is a U.S. person; (5) any agency or branch of a non-U.S. entity located in the United States; (6) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person; (7) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (8) any partnership or corporation if (i) organized or incorporated under the laws of any non-U.S. jurisdiction and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts.

U.S. Treasury securities, such as bills, notes and bonds, are negotiable debt obligations of the U.S. government. These debt obligations are backed by the “full faith and credit” of the government and issued at various schedules and maturities. Income from Treasury securities is exempt from state and local, but not federal, taxes.

Variable Rate Demand Note (VRDN) – VRDNs are long-term, floating-rate municipal securities. These highly liquid securities are payable on demand, typically either daily or weekly, meaning the investor can request repayment of the entire debt amount. The coupon rate will adjust on a periodic basis, either daily or weekly.

The CBOE/CBOT 10-year U.S. Treasury Note Volatility Index (ticker symbol: VXTYN) measures the expected volatility of the price of 10-year Treasury Note futures.

Velocity of Money – A ratio of nominal GDP to the money supply. It can be thought of as the rate of turnover in the money supply—that is, the number of times one dollar is used to purchase final goods and services included in GDP.

VIX – The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts.

W, X, Y, Z

West Texas Intermediate (WTI) – A grade of crude oil used as a benchmark in oil pricing.

Yield Curve – A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity dates.

Yield-on-cost – The yield earned on the original cost of an investment and is defined as the yield earned in the period divided by the original cost of the investment. This measure differs from the traditional yield measure, which divides the yield by the current price. In a market where a security has risen in price and the dividend yield has remained consistent or increased, the yield-on-cost will tend to be higher than the current yield.

Yield Spread – The difference between yields on differing debt instruments, calculated by deducting the yield of one instrument from another.

Yield to Maturity – The rate of return anticipated on a bond if it is held until maturity date.

Yield to Worst (YTW) – The lowest potential yield that can be received on a bond without the issuer actually defaulting.