Glossary

Glossary

O - Z

Offering price

The price at which publicly issued securities are made available for purchase by the investment bank underwriting the issue. A security's offering price includes the underwriter's fee and any management fees applicable to the issue.

Portfolio

The group of assets - such as stocks, bonds and mutuals - held by an investor.

Principal (or capital)

Initial amount of money invested, excluding any subsequent earnings.

Principal-protected notes

A security that guarantees a minimum return equal to the investor's initial investment (the principal amount). See also Guaranteed Linked Notes.

Principal guarantee

In terms of principal-protected notes, 100% of the principal investment is guaranteed, regardless of the condition of the underlying investment.

Pro forma

Description of financial statements that have one or more assumptions or hypothetical conditions built into the data. Also known as historic performance.

Profit Lock-In

In a Profit Lock-In investment, any growth achieved during the time of the investment is protected. With each new NAV (Net Asset Value) high, the Note and the guarantee level rises and is automatically locked in as the new guaranteed amount to be paid at maturity. If the NAV decreases at any time, the highest level achieved is still preserved. However, to receive a guarantee of profit lock-in on the investment, the Notes must be held to maturity.

Risk vs reward

In making a decision about whether to buy a particular stock, a way to calculate the expected gain or loss using a simplistic probability analysis.

S&P 500

The Standard & Poor 500 is widely considered the leading measure of the U.S. equity market. It tracks 500 large cap U.S. companies from a variety of sectors, including industrial, utility, transportation and financial services.

S&P/TSX 60 Index

Represents approximately 75% of Canada's equity market capitalization. It tracks 60 of Canada's largest and most established companies.

SEC (Securities and Exchange Commission)

A federal agency created by the Securities Exchange Act of 1934. The SEC administers statutes designed to promote full public disclosure and protect the investing public against fraudulent and manipulative practices in the securities markets.

Sector mutual funds

Funds that concentrate on one industry such as utilities, health care or small companies. These funds tend to be more volatile than funds holding a diversified portfolio of securities in many industries.

Security

A document identifying ownership of stocks, bonds or other investments. Publicly traded securities can be contributed to a donor-advised fund.

Sharpe ratio

A ratio to measure risk-adjusted performance. It is calculated by subtracting the risk free rate from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns.

Short selling

The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Société Générale

Established in 1864, and among the largest banks in the world, the SG Group has assets over $700 billion and is approximately twice the size of Canada's largest bank. The Group maintains relationships with 50 multinational industrial and service groups, 4,000 institutional investors and 1,300 financial institutions.

Soft Commodity

Generally refer to commodities that are grown, rather than mined, such as coffee, cocoa, sugar, fruit, cotton and grains. Soft commodities are used both by farmers wishing to lock-in the future prices of their crops, and by speculative investors seeking a profit.

Softs

See Soft Commodity

Standard deviation

A measure of the dispersion of a set of data from its mean. The more spread apart the data is, the higher the deviation. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk).

Step-up bond

A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.

Structured products

An instrument whose value is determined by the price movement of the asset underlying the note. It allows investors to realize a profit from favorable price movements.

Switchability

In the ONE Financial Profit Lock-In Notes, switchability allows investors to move between the notes as market conditions or personal investment objectives change.

Total assets

The total market value of securities held in a portfolio.

Total return

When measuring performance, the actual rate of return of an investment or a pool of investments over a given evaluation period. Total return includes interest, capital gains, dividends and distributions realized over a given period of time.

Underlying investment

The performance of Guaranteed LInked Notes is linked to a basket of underlying investments which can consist of baskets of equities, mutual funds, baskets of mutual funds or indices, among others..

Upside Only Investing

Investing in ONE Financial Guaranteed Linked Notes. It means that regardless of market conditions, the principal amount invested is 100% protected.

Value-added

The enhancement a company gives its product or service before offering the product to customers.

Volatility

A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time.

Zero-coupon bond

A debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.