The S&P 500 Index is an unmanaged index that is widely regarded as the standard for measuring large-cap U.S. stock market performance. The index does not incur expenses, is not available for investment, and includes the reinvestment of dividends.
The Russell 2000 Growth Index is a market capitalization weighted index representing those stocks within the approximately 2000 smallest companies in the universe of U.S. equities that exhibit growth characteristics.
The Bloomberg U.S. Aggregate Bond Index (BC Agg) is an unmanaged index which is widely regarded as the standard for measuring U.S. investment grade bond market performance. This index does not incur expenses and is not available for investment. The index includes reinvestment of dividends and/or interest income.
The 60/40 blend is composed of 60% Standard & Poor's 500 Index (S&P 500) and 40% Bloomberg U.S. Aggregate Bond Index (BC Agg) and assumes monthly rebalancing. The S&P 500 is an unmanaged index that is widely regarded as the standard for measuring large-cap U.S. stock market performance. The BC Agg is an unmanaged index that is widely regarded as a standard for measuring U.S. investment grade bond market performance. These indices do not incur expenses and are not available for investment. These indices include reinvestment of dividends and/or interest.
The Russell 3000 Index is a market capitalization wighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of the entire U.S. stock market.
Source ICE Data Indices, LLC (“ICE DATA”), is used with permission. ICE DATA, its affiliates and their respective third party suppliers disclaim any and all warranties and representations, express and/or implied, including any warranties of merchantability or fitness for a particular purpose or use, including the indices, index data and any data included in, related to, or derived therefrom. Neither ICE DATA, its affiliates nor their respective third party suppliers shall be subject to any damages or liability with respect to the adequacy, accuracy, timeliness or completeness of the indices or the index data or any component thereof, and the indices and index data and all components thereof are provided on an “as is” basis and your use is at your own risk. ICE DATA, its affiliates and their respective third party suppliers do not sponsor, endorse, or recommend Osterweis Capital Management, or any of its products or services.
Active Share is a measure of the percentage of holdings in a portfolio that differ from those of the benchmark. It is calculated by taking the sum of the absolute value of the differences of the weight of each holding in the portfolio versus the weight of each holding in the benchmark and dividing by two.
Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of an investment and compares its risk-adjusted performance to a benchmark index. The excess return of the investment relative to the return of the benchmark index is an investment's alpha.
Basis point is a unit that is equal to 1/100th of 1%.
Book value is the total assets of a company, minus all liabilities and any intangible assets.
Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.
Correlation is a measure of the strength of association represents the degree to which the volatility of an investment is related to the volatility of the market during a given period. A Correlation Coefficient of +1 indicates a perfect linear association between an investment and the market, while a Correlation Coefficient of -1 indicates a perfect negative linear association. A value of 0 suggests a lack of association. It is important to note that this statistic provides no information about causation.
Convexity measures the sensitivity of a fixed income security’s duration to changes in interest rates. Securities with lower convexity generally are more sensitive to interest rates than securities with comparable duration and yield but greater convexity.
Duration measures the sensitivity of a fixed income security's price (or the aggregate market value of a portfolio of fixed income securities) to changes in interest rates. Fixed income securities with longer durations generally have more volatile prices than those of comparable quality with shorter durations.
Effective Duration is a duration calculation for fixed income securities with embedded options and takes into account that expected cash flows will fluctuate as interest rates change.
Earnings per share is calculated by taking the total earnings divided by the number of shares outstanding.
Free cash flow represents the cash that a company is able to generate after laying out the money required to maintain and expand the company’s asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value.
MBS refers to mortgage-backed securities.
Option-Adjusted Convexity is a convexity calculation for securities with embedded options and takes into account that expected cash flows will fluctuate as interest rates change.
Option-Adjusted Spread is a spread calculation for securities with embedded options and takes into account that expected cash flows will fluctuate as interest rates change.
Option-Adjusted Duration is a duration calculation for fixed income securities with embedded options and takes into account that expected cash flows will fluctuate as interest rates change.
Price/Book Value Ratio (P/B) is the price of a single share of a security, divided by the book value per share.
Price/Earnings Ratio (P/E) is the price of a single share of a security, divided by the amount of earnings per share.
Price/Free Cash Flow Ratio (P/FCF) is the price of a single share of a security, divided by the free cash flow per share.
Standard Deviation is a measure of dispersion that represents the degree to which an investment’s returns vary around a mean. The greater the Standard Deviation, the more volatile an investment’s returns were during the period measured. This statistic is calculated using the population standard deviation formula: Standard Deviation = Square root of [(Sum of squared deviations from mean)/(Number of returns in the period measured)] If the return periodicity is less than one year, the standard deviation is multiplied by the square root of the number of periods in one year in order to arrive at an annualized measure.
Spread is the difference in yield between a risk-free asset such as a U.S. Treasury bond and another security with the same maturity but of lesser quality.
The Weighted Average Coupon is computed by weighting each security’s coupon rate by its market value in the portfolio. A security's coupon rate is its annual coupon payments relative to the security’s face or par value.
Years to maturity is the remaining life of a bond, the number of years until the bond matures and the issuer repays the bond principal.
Yield to maturity is the rate of return anticipated on a bond if it is held until the maturity date.
The yield to worst (YTW) is the lowest potential yield that can be received on a bond, assuming there is no default.