This Glossary is not designed to be an all encompassing financial services glossary but rather a guide designed to clarify terminology found throughout the Officium Capital materials. This Glossary is sorted alphabetically.
- Administrator
- Macro Fund Services Pty Ltd (ABN 36 105 995 355), which will provide financial, administrative and compliance services for each Fund and Officium.
- Alternative Asset
- Those asset classes outside the major mainstream classes of equities, fixed income and (usually) property where exposure is normally achieved via “bought” (long only) positions. Management of such asset classes may be active or passive. Examples include commodities, infrastructure and private equity.
- Asset Allocation
- The proportion of your total capital you invest in the different asset classes. This will be largely determined by your risk profile.
- Assets
- Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events affecting the entity. The essential characteristics of an asset are:
- a probable future benefit exists involving a capacity to contribute directly or indirectly to future net cash inflows;
- the entity can obtain the benefit and control the access of others to it;
- the transaction or event giving rise to the entity's claim to or control of the benefit has already occurred.
- Australian Securities and Investments Commission (ASIC)
- The Government body responsible under the Corporations Law for regulating companies, company borrowings, and investment advisers and dealers
- Australian Stock Exchange (ASX)
- The stock market conducted by Australian Stock Exchange Ltd (ABN 98 008 624 691), as the context requires. Buy-Sell Spread The buy spread is a cost charged when you enter the Portfolios and the sell spread is a cost charged when you withdraw from the Portfolios. These are called the buy and sell spreads respectively. The buy and sell spreads are designed to cover the transaction costs of either buying or selling investments in a given portfolio or fund.
- Custodian
- Bond Street Custodians Limited (ABN 57 008 607 065), or such other person acting as custodian of the Funds from time to time.
- Distribution
- The payment to unit holders of a fund out of the profits of the fund. These are allocated on a per unit basis.
- Diversification
- Spreading investments over a variety of investment categories in order to reduce risk.
- Diversified Portfolio
- A portfolio that holds a variety of assets over more than one asset class or one market. This may include shares, property, or fixed interest.
- Dividend
- Distribution of part of a company's net profit to shareholders. Usually expressed as a number of cents per share.
- Due Diligence
- Both the quantitative and qualitative analysis and investigation process conducted prior to making an investment decision by a prudent person exercising reasonable care.
- Exit and entry price
- Fund of Funds
- A pooled investment, such as a mutual fund or a hedge fund, whose underlying investments are other funds rather than individual securities.
- Hedge
- Transaction which reduces or offsets the risk of a current holding.
- Hedge Fund
- A fund which utilises specialised trading strategies in order to capture investment opportunities in specific market sectors or asset classes. Hedge funds aim to generate positive, or absolute, returns in both rising and falling markets. This assists investors in minimising the impact of fluctuations in market prices associated with equities or fixed income securities.
- Index (Indices)
- A measure of a change in value for a group of assets. Indices measure the movement in value of the market or various sectors of the market. They provide a broad outline as to how the market is performing.
- Intrinsic Value
- Difference between the current market price of the underlying asset and the exercise price of the option or warrant, but not less than zero. Expressed another way, the value of an option or warrant should it expire immediately with the underlying asset remaining at its current price. When calculating the intrinsic value for warrants, the conversion ratio needs to be taken into account.
- Managed Investments
- Managed Investments offer investors exposure to a professionally managed portfolio of assets through a single security. Investors own a proportion of the investment portfolio commensurate with the size of their investment, and are entitled to any profits and distributions (dividends), but also subject to losses should the value of the portfolio decline.
- Net Asset Value (NAV)
- Book value of a company's assets divided by the number of shares on issue.
- Product Disclosure Statement (PDS)
- Offer document that explains the features of a financial product, risks and benefits and such other information that might reasonably be expected to have material effect on an investment decision.
- Responsible Entity
- Officium or any other person who is appointed for the time being as the responsible entity of the Funds.
- Risk
- Chance or probability that an investment will result in a loss to an investor. Investments promising higher returns will usually have a higher level of risk. Risk can also often be referred to as the level of volatility returns attached to a particular investment.
- Sharpe Ratio
- A measure of a portfolio's excess return relative to the total variability of the portfolio.
- Strategic Asset Allocation
- The process of dividing investments among different kinds of assets (eg. bonds, real estate and cash), to optimize the risk/reward trade-off based on the investor's specific situation and goals.
- Supplementary Product Disclosure Statement (SPDS)
- A document produced by the warrant issuer setting additional or new terms and conditions to an existing Product Disclosure Statement, in respect of warrants which, in the case of Officium Capital Limited, were issued on and from 19 March 2007.
- Tactical Asset Allocation
- Portfolio strategy that allows active departures from the normal asset mix according to specified objective measures of value. A method of investing in which investors modify their asset allocation according to the valuation of the markets in which they are invested.
- Underlying Fund
- A managed investment scheme that a Fund invests in to gain its exposure to the underlying investments of the managed investment scheme.
- Underlying Manager
- The responsible entity or manager of the relevant underlying fund.
- Volatility
- Measure of the amount of fluctuation in price of the underlying asset calculated using the standard deviation of average daily price change.
Australian Financial Services Licence No. 275101