Issue link: https://info.seic.com/i/1445430
SEI Portfolio Update: First Quarter 2023 I Glossary of Financial Terms Alpha source is a term used by SEI as part of our internal classification system to categorize and evaluate investment managers in order to build diversified fund portfolios. An alpha source is the investment approach taken by an active investment manager in an effort to generate excess returns. Another way to define an alpha source is that it is the inefficiency that an active investment manager seeks to exploit in order to add value. Benchmark is a standard against which the performance of an investment can be measured. Beta is the quantitative measure of the Fund's volatility relative to the benchmark used. A beta above 1 indicates the Fund is more volatile than the overall market, while a beta below 1 indicates a Fund is less volatile. Break-even inflation rate is a market-based measure of expected inflation. It is the difference between the yield of a nominal bond and an inflation-linked bond of the same maturity. Covered calls are an investment strategy where an individual sells call options but own an equivalent amount of the underlying stock. Credit rating is derived using Moody's as the ratings source. The purpose of the ratings is to provide investors with a simple system of gradation by which relative creditworthiness of a fund's securities may be noted. Ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). Duration is a measure of a security's price sensitivity to changes in interest rates. Specifically, duration measures the potential change in value of a bond that would result from a 1% change in interest rates. The shorter the duration of a bond, the less its price will potentially change as interest rates go up or down; conversely, the longer the duration of a bond, the more its price will potentially change. Gross return index performance includes the reinvestment of before-tax dividends. Hard currency refers to the currencies of industrialized nations that are seen as politically and economically stable. Hard currencies typically do not depreciate suddenly or fluctuate greatly in value. Prefunded bonds are municipal bonds backed by Treasurys deposited in escrow. Pre-funded bonds are issued by municipalities looking to attain a higher credit rating for their debt. Pre-refunded bonds are bonds that the issuer redeems from the bondholder before the bond's maturity date. Yield curve is a line that plots the yields of bonds of equal credit quality but different maturity dates.