Gloss­ary

Investment strategy where fund managers attempt to achieve excess returns compared to a benchmark through targeted selection and weighing of securities.

Metric that measures the excess return of an investment compared to a benchmark (such as a market index). A positive alpha means the investment strategy performs better than the reference index – the central goal of active management.

Financial service provider who executes the purchase and sale of securities on behalf of investors. Brokers establish the connection between investors and exchanges, enabling them to trade ETFs, stocks, and other securities.

Investment strategy where a large portion of the portfolio (core) is allocated to broadly diversified investments, while smaller portions (satellites) are invested in more specialized strategies.

Class of bonds with a fixed maturity and regular interest payments. These include various forms of bonds such as government bonds, corporate bonds, or covered bonds. The issuer who issues the security generally commits to predefined interest payments and repayment of the nominal value at the end of the term.

In a finance context, an economic situation that is “just right”—not too hot (overheating, high inflation), not too cold (recession), but ideal for growth and stable markets.  

Figure that represents the performance of a specific market or market segment. A price index reflects only the price development of a market, while a performance index additionally accounts for dividends and other returns such as interests. Indices serve as reference points for market developments and as benchmarks for evaluating investment strategies.

Trading of securities during official exchange trading hours on a trading day.

Collective investment vehicle that pools capital from many investors and invests according to a defined strategy. A fund manager invests the pooled funds in various securities – which can be stocks in equity funds or bonds in fixed income funds.

International Securities Identification Number – international securities code that uniquely identifies securities worldwide. It consists of 12 alphanumeric characters and follows a standardized format of country code, base number, and check digit.

This term refers to a leading economic indicator from the Institute for Supply Management that tracks incoming demand for goods and services, signaling future business activity and GDP growth.  

A US tax rule that makes sure foreign investors pay US withholding tax on dividend-like payments from US shares—even if they use financial products (like swaps or synthetic ETFs) instead of owning the shares directly.

Shows the difference between the net performance of an ETF and the performance of the benchmark index that the ETF tracks over a specific period.

Securities identification number – six-digit alphanumeric code for uniquely identifying securities in the German market.