Brandes Investment Partners & Co. (BIPCo) operates under the retail trade name of Bridgehouse Asset Managers in Canada. BIPCo is the manager of the Bridgehouse Funds which are only qualified for sale in the provinces and territories of Canada. Requests from investors to provide services to investors in any other jurisdiction will not be accepted unless BIPCo is lawfully able to provide its services in the jurisdiction concerned. The information on this website is for informational purposes only, does not constitute an offer for products or services and should not be construed as an offer to sell or a solicitation of an offer to buy to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence.
This website is not intended for U.S. persons.
| Term | Definition |
| Alpha | A measure of performance based on the excess return of an investment relative to the return of a benchmark index. |
| Active Share | Percentage of how much a portfolio differs from its benchmark index, with 0% indicating no difference and 100% indicating no common holdings. |
| Agency Mortgage-Backed Security (MBS) | Debt security composed of a pool of residential loans issued by the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). |
| Asset Coverage | Ability to cover debt obligations with assets. |
| Basis Point | 1/100th of 1%. |
| Beta | Measure of a security or portfolio's volatility compared to the broad market's volatility. |
| Book to Market | Common shareholders' equity divided by market capitalization. |
| Book Value | Assets minus liabilities. Also known as shareholders’ equity. |
| Bullet Security | A debt investment for which the principal is repaid in a balloon payment at maturity. |
| Callable Bond | A debt security that can be repaid by the issuer prior to maturity. |
| Capital Adequacy Ratio | Capital divided by risk-weighted assets. |
| Capital Expenditure (Capex) | Money spent to purchase or upgrade physical assets such as property, plant, and equipment. |
| Cash Flow | Amount of cash generated minus the amount of cash used by a company in a given period. |
| Cash Pay Bond | Debt security which makes interest payments in cash. |
| Commercial Mortgage-Backed Security (CMBS) | Debt security composed of a pool of commercial property loans. |
| Consumer Price Index | Measurement by the U.S. Bureau of Labor Statistics of price changes over time for a representative basket of goods and services. |
| Correlation | Statistical measure of how two securities move in relation to each other. |
| Coupon Rate | Annual interest rate on a debt security as a percentage of face value. |
| Credit Risk | Likelihood of loss due to a borrower defaulting on a loan. |
| Credit Spread | Difference between yields from bonds of similar maturity but different credit quality. |
| Discount Rate | Amount of interest charged by the Federal Reserve for short-term loans to commercial banks and other financial institutions. |
| Dividend Payout Ratio | Amount of dividends paid to shareholders relative to net income. |
| Drawdown | Percentage change in the value of a security or portfolio from a peak to a subsequent trough. |
| Dry Powder | Treasuries or other debt securities that can be liquidated on short notice. |
| Dividend Yield | Dividends per share divided by price per share. |
| Dot Plot | Data points plotted on a graph to show trends such as projected interest rates. |
| Duration | Weighted maturity of a fixed-income investment’s cash flows, used in the estimation of the price sensitivity of fixed-income securities for a given change in interest rates. |
| EBITDA | Earnings before interest, taxes, depreciation and amortization. |
| Enterprise Value | Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents. |
| Enterprise Value/EBIT | Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by earnings before interest and taxes. |
| Enterprise Value/EBITDA | Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by earnings before interest, taxes, depreciation, and amortization. |
| Enterprise Value/Free Cash Flow | Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents divided by total cash flow from operations less capital expenditures. |
| Enterprise Value/Sales | Market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents, divided by annual sales. |
| Federal Funds Rate | Amount of interest depository institutions charge to lend reserve funds overnight to other depository institutions. |
| Floating Rate Note | Debt instrument that pays a variable rate of interest. |
| Forward Earnings | Consensus earnings estimates for a future period, usually the next 12 months or next fiscal year. |
| Forward Price/Earnings | Price per share divided by earnings per share expected over the next 12 months or next fiscal year. |
| Free Cash Flow | Total cash flow from operations less capital expenditures. |
| Gap Down | Significant decrease in price of a financial instrument between market close and opening, or when there is little to no trading. |
| Graham-and-Dodd Investment Approach | Method described by Benjamin Graham and David Dodd in their 1934 book Security Analysis which seeks to identify securities that may be underpriced relative to their estimated intrinsic value. |
| Idiosyncratic Risk | Possibility of loss prevalent in a particular asset class. |
| Indenture | Legal contract between a bond issuer and bondholder. |
| Interest Coverage | Earnings before interest and taxes during a given period divided by interest expense due in that period. |
| Investment Grade | Credit rating that indicates a debt instrument has a relatively low risk of default. |
| LIBOR | London Interbank Offered Rate. A survey of what London banks expect to pay to borrow overnight from other London banks. |
| Margin Call | Request from a broker to increase a margin account's balance when it falls below a required minimum. |
| Margin of Safety | Discount of a security’s market price to what the firm believes is the intrinsic value of that security. |
| Market Capitalization | Number of common shares outstanding multiplied by market price per share. |
| Net Asset Value | Total assets minus liabilities, divided by the number of outstanding shares. |
| Net Present Value | Difference between present value of cash inflows and present value of cash outflows over a given period. |
| Net Cash | Total cash minus total debt. |
| Net Interest Income | Difference between interest revenue and interest expense. |
| Net Interest Margin | Difference between interest revenue and interest expense as a percentage of income-generating assets. |
| Net-Net | When a company trades for less than the value of current assets minus all liabilities. |
| Nifty Fifty | Nickname for a group of large U.S. companies in the 1960s and '70s, characterized by high price/earnings and consistent earnings growth. |
| Normalized Earnings | Earnings adjusted to remove effects of one-time, unusual, or seasonal influences. |
| Operating Margin | Operating income divided by net sales. |
| Option-Adjusted Spread | Difference between the interest rate paid by a fixed-income security and the risk-free rate of return, adjusted to take into account an embedded option. |
| Par Value | Amount a bond issuer promises to repay when the bond matures. |
| Patent Cliff | Patent expirations for pharmaceutical companies which typically result in a drop in sales. |
| Personal Consumption Expenditures Price Index | Measurement by the Bureau of Economic Analysis of changes in prices U.S. consumers pay for goods and services. |
| Price/Book | Price per share divided by book value per share. |
| Price/Cash Flow | Price per share divided by cash flow per share. |
| Price/Earnings | Price per share divided by earnings per share. |
| Price/Tangible Book Value | Price per share divided by tangible book value per share. |
| Profit Margin | Net income divided by revenue. |
| R2 (R-squared) | Percentage of a security or portfolio’s results that was likely caused by the movements of a benchmark index. |
| Reflation Trade | Purchase of a security expected to perform well because of or during an economic recovery. |
| Return on Assets | Net income divided by total assets. |
| Return on Equity | Net income divided by shareholder equity. |
| Return on Invested Capital/Return on Capital | Net income minus dividends paid, divided by total capital. |
| Secured Debt | Loan backed by the borrower's collateral. |
| Sell Side | The part of the financial industry involved with the creation, promotion, analysis, and sale of securities. |
| Sharpe Ratio | Portfolio return minus the risk-free rate—such as that of the 10-year U.S. Treasury bond—divided by standard deviation of the portfolio's excess returns. |
| Shiller Price/Earnings | Price divided by real (inflation-adjusted) per-share earnings over a 10-year period |
| Standard Deviation | A data set's dispersion from its mean. |
| Systematic Risk | Possibility of loss inherent to an entire market. Usually considered undiversifiable. |
| Systemic Risk | Possibility of loss from a company-level event that could destabilize an entire industry or economy. |
| Tangible Book Value | Book value minus intangible assets (e.g., goodwill). |
| Tangible Equity | Book value minus intangible assets (e.g., goodwill) and preferred equity. |
| Term Structure of Interest Rates | Graph that depicts yields offered by bonds of similar quality at different maturities. |
| Total Return | Income plus capital appreciation. |
| Value Bonds | Debt securities selling at a discount to our estimates of their intrinsic value. |
| CBOE Volatility Index (VIX) | Shows the market’s expectation of 30-day volatility. Constructed using the implied volatilities of S&P 500 Index options. |
| Working Capital | Current assets minus current liabilities; a measure of a company’s efficiency and short-term financial health. |
| Write-Down | Reduction in the book value of an asset. |
| Yield | Annual income from an investment (dividend, interest, etc.) divided by the current market price of the investment. |
| Yield Curve | Graphical comparison of the relationship between interest rates for loans of various maturities with similar credit quality. |
| Yield Spread | Difference in yield from a Treasury security and another debt security of similar maturity. |
| Yield to Maturity | Total return expected from a bond held until its expiration date. |