Managing Asset Management

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An account is a component of a portfolio. An account can be either a real account (i.e., it is a copy of an account at a bank or a custodian) or internal (i.e., it is used for fees, loan positions or other internal accounting requirements). An account is normally included in the evaluation of a portfolio, but it can also be used to represent an external account which would not be included.  An account can be queried to provide balances for a cash account or the stock of fund shares for a security account, and the detailed transactions that make up the balances. Account types currently supported in Webfolio: Capital Call; Current; Error; External; Fees; Fiduciary; Loan; Margin; Payable; Receivable; Security.

account exception
An overdrawn account; captured on the Exception Handling Form for Accounts.

account type constraint
An account type constraint is a test criterion for the balance of an account either of the weight of the balance versus the overall value of the portfolio; or the actual base balance against predetermined limits.

A service provider that hedge funds hire to calculate fund performance, oversee shareholder relations and perform other record-keeping functions. U.S.-based fund managers that run offshore funds employ local administrators to handle back-office functions for those entities—in order to gain the tax advantages available to truly offshore vehicles.

advisory portfolio
A portfolio managed by an external portfolio manager. Activity on the portfolio is generally limited to providing allocation recommendations and performing analysis of past performance.

A user-definable short form of a long or formal name. Webfolio often uses the alias in reports and screen listings.

Prospective investment decisions created in Front Office. A directive is an allocation for an internally managed portfolio. A recommendation allocation is used for advisory portfolios. Typically allocations are assessed and ratified before being sent to the middle office for execution. Allocations are further sub-divided by type, including: buy; sell, re-weight; switch; transfer.

Measures the value that an investment manager produces, by comparing the manager's performance to that of a risk-free investment (usually a Treasury bill). For example, if a fund had an alpha of 1.0 during a given month, it would have produced a return during that month that was one percentage point higher than the benchmark Treasury. Alpha can also be used as a measure of residual risk, relative to the market in which a fund participates

alternative investments
A category of investments that includes arbitrage vehicles, commodities, distressed securities, hedge funds, managed funds, oil-and-gas partnerships, private equity, real estate, timber, venture capital or other assets whose returns aren't correlated to the stock and bond markets.

amortized fees
A fee can be amortized over a user defined period, calculated and charged according to the parameters set up for the fee. The amortization can be linear or actuarial.

annual rate of return
The compounded gain or loss in a fund's net asset value during a calendar year.

Assets Under Management

average annual return / annualized rate of return / annualized return
Cumulative gains and losses over a number of years divided by the number of years of an investment, with compounding taken into account. The measure is used to compare returns on investments for periods ranging from partial to multiple years

average gain (gain mean)
This is a simple average (arithmetic mean) of the periods with a gain. It is calculated by summing the returns for gain periods, then dividing the total by the number of gain periods.

average loss (loss mean)
This is the simple average (arithmetic mean) of the periods with a loss. It is calculated by summing the returns for loss periods, then dividing the total by the number of loss periods.

average monthly return
Cumulative gains and losses over a number of months divided by the number of months of an investment, with compounding taken into account.

average return / average rate of return
This is a simple average return (arithmetic mean) calculated by summing the returns for each period and dividing the total by the number of periods. The simple average does not take the compounding effect of investment returns into account.

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