Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Term	Definition
Bought in	The process whereby CDP buys shares on the market to satisfy the delivery obligation, if an investor does not have the required shares in his account on the settlement date.
Brokerage commission	A fee charged by a broker for his/her service in facilitating a transaction.
Clearing fee	A fee charged by clearing corporations for their services provided to investment firms.
Close-end fund	A type of fund where there is a fixed amount of shares the fund will issue.
Continuous pricing	Market prices are available throughout the trading day.
Custodian	An agent, bank, trust company, or other organization which holds and safeguards an individual's, mutual fund's, or investment company's assets for them.
Discount	Amount (stated in dollars or a percent) by which the market price of an ETF is below its net asset value.
Diversification	A strategy of spreading investments among many different securities or sectors to reduce the risk of owning any single investment. Diversification reduces both the upside and downside potential and allows for more consistent performance under a wide range of economic conditions.
Dividend	A distribution of earnings to shareholders of a corporation or an investment company.
ETF	Refer to exchange traded fund.
Exchange traded fund	A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
Foreign exchange risk	The risk of an investment's value changing due to changes in currency exchange rates.
Fund manager	A investment professional whose main responsiblities include investing the assets of a mutual, pension, trust, or hedge fund, implementing investment strategy and managing the day-to-day portfolio trades.
Hedge	A strategy used to manage investment risk.
IIV	Refer to indicative intraday value.
iNAV	Refer to indicative net asset value.
Index	A statistical indicator providing a representation of the value of the securities which constitute it. Indices often serve as barometers for a given market or industry and benchmarks against which financial or economic performance is measured.
Index tracking	A fund designed to track the performance of an index.
Indicative intraday value.	Refer to indicative net asset value.
Indicative optimized portfolio value	Refer to indicative net asset value.
Indicative net asset value	An estimate of the net asset value, which is calculated periodically throughout the trading day.
Interest rate risk	The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between two rates, in the shape of the yield curve or in any other interest rate relationship.
Intraday	During a single trading day.
IOPV	Refer to indicative optimized portfolio value.
Limit order	An order to a broker to buy a specified quantity of a security at or below a specified price, or to sell it at or above a specified price. Limit orders also allow an investor to limit the length of time an order can be outstanding before being cancelled.
Liquidity	The ability to easily turn assets into cash. An investor should be able to sell a liquid asset quickly with little effect on the price.
Margin purchases	Purchasing securities with borrowed money, and using the securities themselves as collateral.
Market day	A day on which Singapore Exchange is open for securities trading
Market maker	A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security.
Market risk	The day-to-day potential for an investor to experience losses from fluctuations in securities prices. This risk cannot be diversified away.
NAV	Refer to net asset value.
Net asset value	Value of all the fund assets minus the value of the liabilities, divided by the number of shares outstanding.
Open-end fund	A type of fund where there are no restrictions on the amount of shares the fund will issue. Open-ended funds issue new units, or cancel units, as investors move into and out of the fund. This creation and redemption process helps keep the funds market price in line with its underlying net asset value.
Participating dealers	Large institutional investors who are authorized to create and redeem shares of an ETF. They may also be market makers.
Premium	Amount (stated in dollars or a percent) by which the market price of an ETF is above its net asset value.
Primary market	Where a newly issued security is first offered. All subsequent trading of this security occurs is done in the secondary market.
Redemption	The process where Participating Dealer redeems ETF units in exchange for securities from the Fund Manager.
Sales charge	A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select the mutual fund best suited to their needs.
Secondary market	The market in which securities are traded after they are initially offered in the primary market.
Security	An investment instrument, other than an insurance policy or fixed annuity, issued by a corporation, government, or other organization which offers evidence of debt or equity.
Settlement date	The third market day following the trade day.
SGX-ST	Singapore Exchange Securities Trading Limited
Short sale	The sale of a security or other financial instrument not previously owned by the seller in the expectation that it will be possible to repurchase that instrument at a lower price some time in the future.
Stock	A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.
Stop-loss order	An order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a security position.
Trustee	An individual who holds or manages assets for the benefit of another.
Unit trust	An unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund.
Volatility	The relative rate at which the price of a security moves up and down. Volatility is found by calculating the annualized standard deviation of daily change in price. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.
Volume	The number of shares or contracts traded in a security or an entire market during a given period of time. It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity.