Annual Return

The percentage gain or loss in a fund's value over a one-year period. This can be calculated for any 12-month period or may refer specifically to calendar year returns.

Asset Class

A group of investments with similar characteristics and subject to the same laws and regulations. Common asset classes include:

• Equities (stocks)

• Fixed income (bonds)

• Cash and cash equivalents

• Real estate

• Commodities

Distribution

A payment of income or capital gains from a fund to its investors. Distributions can be paid monthly, quarterly, or annually. They may consist of:

• Interest income

• Dividend income

• Capital gains

• Return of capital

Distribution Yield

The income generated by a fund's investments that is paid out to investors, expressed as a percentage of the fund's net asset value. For example, a fund with a 4% distribution yield pays out 4% of its NAV to investors annually.

Dividend Reinvestment Plan (DRIP)

A program offered by some companies or funds that automatically reinvests cash dividends by purchasing additional shares or fractional shares on behalf of the investor.

ESG (Environmental, Social, and Governance)

A set of criteria used to evaluate a company's operations beyond financial metrics:

• Environmental: Factors like energy use, waste, pollution, and resource conservation

• Social: Relationships with employees, suppliers, customers, and communities

• Governance: Leadership, executive pay, audits, internal controls, and shareholder rights

ESG investing aims to generate long-term competitive financial returns while creating a positive societal impact.

Fund AUM

The total market value of all assets held by the specific fund.

Investment Vehicle

A product or structure used by investors to gain financial returns. Common investment vehicles in Canada include:

• Mutual funds

• Exchange-traded funds (ETFs)

• Stocks

• Bonds

• Real Estate Investment Trusts (REITs)

IRR (Internal Rate of Return)

A metric used to estimate the profitability of investments. IRR is the discount rate that makes the net present value of all cash flows equal to zero. It's often used to compare different investment opportunities.

Last Return

The most recent performance figure for the fund, usually representing the percentage change in NAV over the last completed period (e.g., month-end or quarter-end).

Liquidity

How easily an investment can be converted to cash without a significant loss in value. Cash is the most liquid asset.

Management Fee

An annual fee charged by the fund manager to cover the costs of managing the fund's portfolio, typically expressed as a percentage of the fund's assets.

Manager

The individual or firm responsible for making investment decisions and managing the fund's portfolio according to its stated objectives.

Manager AUM (Assets Under Management)

The total market value of assets that the fund manager oversees across all their funds and investment strategies.

Mark to Market (MTM)

An accounting method that values assets based on their current market price rather than their historical cost. This provides a more accurate picture of an asset's current value.

NAV (Net Asset Value)

The total value of a fund's assets minus its liabilities, divided by the number of outstanding units or shares. NAV is typically calculated daily and represents the per-unit price of the fund.

Net

In financial contexts, "net" typically refers to a value after all deductions have been made. For example, net income is the amount left after subtracting all expenses from total revenue.

Net Cash on Cash

A return metric used primarily in real estate investing. It measures the annual after-tax cash flow generated by a property relative to the total cash invested. It's calculated as:

(AnnualCashFlow/TotalCashInvested)x100

Net IRR

The Internal Rate of Return after accounting for all fees, expenses, and carried interest. It represents the actual return that limited partners (investors) receive from their investment.

NOI (Net Operating Income)

A calculation used to analyze the profitability of income-generating real estate investments. NOI is calculated as:

TotalRevenue−OperatingExpenses=NOI

It does not include capital expenditures, debt service, or income taxes.

Open-end structure

A type of investment fund that can issue and redeem shares at any time. Most mutual funds are open-end, allowing investors to buy or sell shares based on the current net asset value (NAV).

Performance Fee

An additional fee charged by the fund manager if the fund's performance exceeds a predetermined benchmark or hurdle rate. It's designed to incentivize the manager to generate strong returns.

Performance Participation Allocation

A fee structure where the fund manager receives a percentage of the fund's profits above a certain threshold. For example, the manager may get 15% of returns above 8% per year. This aligns the manager's interests with investors.

Redemptions

The process by which investors can sell their fund units or shares back to the fund. Redemption policies vary and may include:

• Notice periods

• Redemption fees

• Lockup periods

• Gates (limits on total redemptions)

Return

The gain or loss on an investment, usually expressed as a percentage. Returns can include:

• Capital gains/losses from price changes

• Income from interest, dividends, etc.

• Total return combines both capital gains and income

Structure

This refers to how an investment fund is legally organized. Common structures for Canadian investment funds include:

• Mutual fund trusts

• Limited partnerships

• Corporations

The structure impacts things like taxation, liability, and regulatory requirements.

Sub-Fund Manager

A third-party investment manager hired by the primary fund manager to handle a specific portion of the fund's portfolio, often for specialized expertise in a particular asset class or strategy.

Subscription

The process of investing money to purchase units/shares of an investment fund. Investors "subscribe" to buy into a fund.

Target Return

The investment return that the fund aims to achieve over a specified period. This is often stated in the fund's prospectus or marketing materials but is not guaranteed.

YTD Return

Year-to-Date Return, which measures the fund's performance from the beginning of the current calendar year to the most recent date. It shows how the fund has performed so far this year.