The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has an exceptional degree of creditworthiness and can easily meet its financial commitments
An actively managed fund that aims to generate positive returns in both up markets and down markets
Alpha is the component of the fund’s return that is not correlated to the markets. Hence it is a performance linked to the idiosyncratic risk of the fund.
Investments considered outside of the traditional asset classes of stocks, bonds and cash, e.g. real estate, commodities, options and financial derivatives. Often used by hedge funds
Arbitrage usually refers to a financial strategy designed to profit from a discrepancy in the market. The arbitrage opportunity occurs when short term pricing inefficiencies are detected. A typical arbitrage would be to simultaneously buy and sell similar financial instruments in different markets to capture an abnormal price difference.
is an investment strategy that seeks to balance the risk and rewards from investing. It entails adjusting the amount (or percentage) of money that is invested in different asset classes such as stocks, bonds, cash. This adjustment will depend on an investor’s tolerance for risk, their particular goals and investment time frame.
Asset Backed Securities (ABS) are financial securities backed by specific assets. The collateral typically used to back ABS include: auto loans, credit card receivables, housing loans or student loans. ABS differ from traditional secured debt as they are issued by special purpose vehicles. This separates the underlying assets from the original institution which issued the loans, providing further protection.
© 2020 BNP PARIBAS ASSET MANAGEMENT USA, Inc., All rights reserved.
BNP PARIBAS ASSET MANAGEMENT USA, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended.
These documents and video clips may also include information obtained from affiliated investment management companies within BNP Paribas Asset Management, the brand name of the BNP Paribas group’s asset management services. The documents and video clips are produced for informational purposes only and do not constitute: 1. an offer to buy nor a solicitation to sell, nor shall they form the basis of or be relied upon in connection with any contract or commitment whatsoever or 2. investment advice. Any opinions included in these documents and video clips constitute the judgment of the author/ presenter at the time specified and may be subject to change without notice.