Glossary


Affidavit	See bank declaration.
Annual report/semi-annual report	For each fund it manages, the management company publishes an audited annual report within four months of the close of the financial year and an unaudited semi-annual report within two months of the end of the first half of the financial year. The annual report contains e.g. the annual financial statements, the statement of changes in the fund’s net assets, the structure of the portfolio and the auditor’s report. The semi-annual report contains the most important half-year results.
Arbitrage	Exploiting price differences in the same securities or related assets - be it locally or internationally - whereby the securities are bought on the market offering a lower price and sold on the market offering a higher price.
Asset allocation	The strategic investment of the available assets in different asset classes, such as money market instruments, bonds, equities, real estate, etc. The portfolio is also broken down by sector and according to geographic and currency criteria.
Asset allocation funds	Investment funds which replicate the investment strategies of the providers for the various risk classes. Asset allocation funds invest worldwide in various instruments, depending on the risk category equities or bonds are overweight. Also known as strategy funds, portfolio funds, investment objective funds, asset management funds or mixed funds.
Asset manager	See portfolio manager.
Asset value	The net assets of a fund divided by the number of units in circulation.
Auditors	An organisation independent of the fund management company and the custodian bank which regularly monitors compliance with the legal regulations. Auditors must be recognised by the supervisory authorities, which in Switzerland is the Federal Banking Commission.
Average residual term to maturity	The residual term to maturity is the remaining life of a bond up to its final due date. In a fund, the average residual term to maturity is calculated from the weighted residual maturities (weighted according to capital invested) of all bonds held in the fund.

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