A security is a certificate that certifies a contractual right such as co-ownership of a company (e.g. a share). The prerequisite for exercising an ownership right is the possession of a certificate. Securities that are traded on a stock exchange are also known as commercial paper.
Analysis, assessment and valuation of securities (equities, bonds, convertible bonds, certificates, etc.) in respect of any possible advantages/disadvantages of a potential investment. Securities analysis therefore entails an examination and assessment of the issuer. Its main purpose is to evaluate all of the information available on the financial position of the issuer. Information is provided by financial analysis. Securities analysis is usually broken down into the following stages:
Analysis (preparation and highlighting of "critical" points that may have a positive or negative effect on an investment);
Prognosis (assessment of future income trends based on the analysis of historical data and the information available on the present position and possible future developments);
Valuation (result of forecast expectations taking into account numerous external price-determining factors, such as the capital market, the state of the economy, etc.).
s Fonds Plan
The s Fonds Plan stands for strategic investments. It makes it possible to immediately and automatically contribute each payment and dividend to a fund (as specified by the investor). This ensures automatic investment in the capital market.
A share is a security that evidences a shareholder's rights acquired through the purchase of a share of the capital stock of a corporation. The shareholder is usually accorded the following rights:
an appropriate share in profits (dividend)
a proportionate share of liquidation proceeds
a voting right at the AGM commensurate with capital share Equities can be listed and traded on the stock exchange.
The Sharpe ratio is used to determine the risk/reward ratio of a fund. It is calculated by deducting the risk-free income from the annual average return and dividing the result by the average annual volatility. The higher the Sharpe ratio, the better the fund has performed relative to the risk potential of its portfolio.
Immediately comprehensible: five stars are better than one - it couldn't be simpler!
With a short position, the investor sells (short) a security that is not physically held. As with the long position, the share movement is reflected 1:1 in the security, whereby in contrast to the long position, the loss risk in a short position is unlimited. The investor only profits if the price of the short-sold security falls.
Split is a technical term in the securities business. For securities with a nominal par value, such as equities, a split is achieved by dividing this nominal par value, e.g. a share with a par value of 1,000 can be split to give 10 shares with a par value of 100; for securities with no nominal par value, such as mutual funds, a split is generally achieved by dividing the smallest denomination, e.g. one unit is divided into 10 (or two into three, etc.). The most important thing to note, however, is that the investor can never lose from a split even though the value (market price) of his individual security is less than it was before the split. This is because he now has more securities than previously, the total value of which is the same as before the split. On the other hand, a split makes equities in particular "cheaper", and therefore more attractive to ordinary investors, which usually results in rising market prices.
(Based on the brochure published by Erste Bank der oesterreichischen Sparkassen AG: "Was ein Privatanleger über inländische Investmentfonds wissen sollte.")
The "SRRI indicator" is used to allocate investment funds to one of three different risk categories (low risk, medium risk, above-average risk). SRRI stands for "Synthetic Risk and Reward Indicator" and is calculated in accordance with the rules issued by the Committee of European Securities Regulators. This indicator forms an integral part of the Key Investor Document (KID) and states the fluctuation of the fund unit price on a scale from 1 to 7.
Investment funds with a low SRRI typically exhibit less fluctuation and, hence, a lower probability of loss. Funds with a high SRRI experience greater fluctuation as well as a greater risk of loss.
The fund category is not a reliable guide to future performance and may change over time.
A Category 1 rating should not be construed as indicating that the investment is free of any risk. Nor does the rating constitute a target or guarantee. The risk indicator (SSRI indicator) is stated separately for each of our funds.
SRRI indicator Risk categories Volatility intervals
1 Low risk 0% to 0.5%
2 0.5% to 2.0%
3 2.0% to 5.0%
4 Medium risk 5.0% to 10.0%
5 Above-average risk 10.0% to 15.0%
6 15.0% to 25.0%
7 At least 25.0%
How the SRRI indicator is calculated
Volatility (i.e. the degree of fluctuation in the price) is calculated on the basis of the weekly data (returns) for the investment fund over the last five years. If the history of the investment fund is too short, the performance of a comparable asset or alternative methods stipulated by law can be used for calculating the SRRI. In the case of a dividend payout, these are also taken into account. Volatility as well as the SRRI as a risk indicator do not draw any distinction in the direction of the fluctuations but merely express its magnitude. 3.0% volatility, for example, means that the value of the investment fund has fluctuated by an annualised average of plus/minus 3.0% over the past five years.
See also Risk type.