Glossary

active investing: An investing approach that seeks to exceed the returns of the financial markets. Active managers rely on research, market forecasts, judgment, and experience in making investment decisions.

advisor: The organization employed by a mutual fund to manage assets and provide research and related services. Advisors must register with the Securities and Exchange Commission and state securities commissions as Registered Investment Advisors.

all-weather fund: A fund that long-term investors can hold with relative safety throughout a complete market cycle. Market timing, low volatility, and asset allocation funds may be all-weather.

alpha: A portfolio's performance minus the performance of a hypothetical benchmark portfolio of equivalent risk. A positive alpha is considered a measure of management's ability. In Wall Street vernacular, “searching for alpha” means an advisor is seeking above average returns relative to a benchmark.