What Is Fund Overlap? Fund overlap is a situation where an investor owns shares in several mutual funds or exchange traded funds (ETFs) with overlapping positions. For instance, if an investor owns both an S&P 500 index mutual fund and a technology sector ETF, they would be overlapping quite a bit with the FAANG stocks
What Is Fundamental Analysis? Fundamental analysis (FA) measures a security’s intrinsic value by examining related economic and financial factors. Intrinsic value is the value of an investment based on the issuing company’s financial situation and current market and economic conditions. Fundamental analysts study anything that can affect the security’s value, from macroeconomic factors such as
What Is a Fundamentally Weighted Index? A fundamentally weighted index is a type of equity index in which components are chosen based on fundamental criteria as opposed to market capitalization. Fundamentally weighted indexes can base their construction on a range of fundamental metrics, such as revenue, dividend rates, earnings, or book value. Fundamentally weighted indexes provide
What Are Fundamentals? Fundamentals include the basic qualitative and quantitative information that contributes to the financial or economic well-being of a company, security, or currency, and their subsequent financial valuation. Where qualitative information includes elements that cannot be directly measured, such as management experience, quantitative analysis (QA) uses mathematics and statistics to understand the asset and
What Is a Funded Debt? Funded debt is a company’s debt that matures in more than one year or one business cycle. This type of debt is classified as such because it is funded by interest payments made by the borrowing firm over the term of the loan. Funded debt is also called long-term debt
What Is Funded Status? Funded status compares the assets to the liabilities in a defined-benefit (DB) pension plan. This data point is useful in understanding how many employees are truly covered in a worst-case scenario if the company or other organization is forced to pay all of its retirement benefits at once. Key Takeaways Funded
What Is Fund Flow? Fund flow is the cash that flows into and out of various financial assets for specific periods of time. It’s usually measured on a monthly or quarterly basis. Fund flow doesn’t measure the performance of any asset. For example, with mutual funds, fund flow measures the cash involved in share purchases
What Is a Funding Cover? Funding covers refer to insurance premiums held in an account in conjunction with an excess-of-loss reinsurance, which is used to pay insurance claims. Funding covers act as resource pools that can be drawn down to pay for claims, with unused funds returned to either policyholders or ceding insurers. Key Takeaways
What Is a Fund Manager? A fund manager is responsible for implementing a fund’s investing strategy and managing its portfolio trading activities. The fund can be managed by one person, by two people as co-managers, or by a team of three or more people. Fund managers are paid a fee for their work, which is
What Is Froth? Froth refers to market conditions preceding an actual market bubble, where asset prices become detached from their underlying intrinsic values as demand for those assets drives their prices to unsustainable levels. A frothy market is one where investors begin to ignore market fundamentals and bid up an asset’s price beyond what the
