GLOSSARY

Systematic investment style

This refers to investors who select stocks in a systematic, rather than an ad-hoc manner, often analysing ratios such as Price/Earnings to measure the underlying value of a stock or accounting ratios to measure a stock’s quality.

SPI Futures

The SPI 200 Futures contract is an equity index futures contract which tracks the pre-tax performance of the S&P/ASX 200 Index. It provides all the traditional benefits of equity index derivatives and is ranked in the top 10 equity index contracts in Asia in terms of traded volume.

SMSF

Self managed super fund

Short positions

Short positions occur when you borrow a security from an existing holder (with their permission, usually paying them a fee for the privilege) and sell it, hoping the price of that security will fall, allowing you to buy back the security at a cheaper price.

Share buyback

A share buyback is when companies repurchase their own shares, thereby returning capital to investors.  Shares can be repurchased on-market (and then cancelled) or off-market which enables companies to distribute the franking credits on their balance sheets to the investors that most value them.

Sector bias

A sector bias occurs when a portfolio has a significantly different weight to a given sector than its benchmark.  High income funds often have a bias towards the high-yielding sectors such as financials and telecoms.

S&P/ASX300 Accumulation Index

The S&P/ASX 300 is designed to provide investors with broader exposure to the Australian equity market. The index is liquid and float-adjusted, and it measures up to 300 of Australia’s largest securities by float-adjusted market capitalization. The S&P/ASX 300 index covers the large-cap, mid-cap, and small-cap components of the S&P/ASX Index Series.

S&P/ASX 200 Franking Credit Adjusted Daily Total Return Index (Tax-Exempt)

The S&P/ASX 200 provides broad exposure to the Australian share market and is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalization. This index adjusts the total return of the S&P/ASX 200, one of the most widely followed Australian equity benchmarks, for the tax effect […]