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Section 5
Investment Survey Glossary Absolute Return Investment Strategy
FTSE JSE All Share Index (ALSI)
An actively managed investment objective that seeks consistent, positive returns regardless of whether markets are rising or falling; and without reference to a benchmark index for comparison. While not all absolute return strategies are alike, typically, the goal is to produce returns in excess of the inflation rate and/or cash that can be measured by the consumer price index (CPI) while protecting against capital losses.
A popular index used to benchmark performance for South African equity portfolios. This index represents a weighted basket of 99% of the full market capitalisation of all eligible companies listed on the main board of the JSE subject to free float and liquidity criteria. The index can be divided by size into the Top 40, Mid Cap and Small Cap Indices.
Active Fund Management An investment approach that relies on the belief that it is possible to outperform the market. Typically an actively managed fund would select asset classes and investment securities that are expected to perform better than the market or benchmark. Active Return The difference in returns between a fund and its benchmark at each point in time. Africa Global Funds (AGF) The New York-based Africa Global Funds organization provides complete coverage and analysis of the biggest players in African investment space. Drawing on an intense dialogue with a constantly expanding group of key decision-makers in the industry, we cover traditional and alternative asset classes of the African asset management space. All Bond Index (ALBI) A popular index used to benchmark performance for South African fixed income (bond) portfolios. This index represents a weighted basket of the top 20 South African bonds ranked dually by market capitalisation and liquidity. Alpha Alpha is a measurement of the performance of an investment portfolio against a benchmark. The alpha is the return the fund or portfolio makes, relative to the return of the benchmark.
Asset Class Categories of investments that behave similarly and are subject to similar market forces. Major asset classes include equities (shares), fixed income (bonds and cash), commodities and property. Assets Under Management (AuM) The market value of assets held by an investment manager on behalf of clients. Balanced Fund Strategy An actively managed investment framework where the asset allocation, strategies employed and risk assumed to achieve the specified investment objective is delegated to the investment manager. Benchmark An independently constructed reference (usually a publicly available index) that sets an objective rate of return (the neutral position) that should be used to test the effective implementation of an investment strategy. A good benchmark will also be representative of the asset class or mandate and is investable itself. Bias A particular tendency, trend, or opinion, especially one that is preconceived or unreasoned Black Swan A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events can cause catastrophic damage to an economy by negatively impacting markets and investments, but even the use of robust modeling cannot prevent a black swan event.
