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Glossary

Investment terms

A glossary with explanations of common terms in investing, fund management and finance.

A

Accumulating fund
A fund that automatically reinvests dividends instead of paying them out. This creates a natural compounding effect over time.
Active management
A management strategy where the portfolio manager actively selects which companies to include, as opposed to an index fund that tracks a benchmark. The goal is to generate returns above the benchmark.
Active share
A measure of how much of a portfolio differs from its benchmark index, expressed as a percentage. A high active share is a precondition for outperforming the index, though no guarantee that the deviation will be a good one.
All-cap
A fund mandate that allows investments in companies of all sizes, from small cap to large cap. Gives the manager flexibility to find the best investments regardless of company size.
Alpha
Returns above what can be explained by market risk. Positive alpha indicates the manager has created added value compared to the benchmark.
AUM (Assets Under Management)
The total market value of all assets managed by a fund manager.

B

Balance sheet
A summary of a company's assets, liabilities and equity at a given point in time. A strong balance sheet means low debt and solid financial standing.
Bear market
A market that has fallen at least 20 percent from its recent peak. Often linked to pessimism, declining earnings or economic downturn.
Benchmark
A reference index used to evaluate a fund's performance, for example OMXS30 or SIX Portfolio Return Index.
Beta
A measure of a portfolio's sensitivity to market movements. A beta of 1.0 means the portfolio moves in line with the market. Below 1.0 indicates lower volatility.
Bottom-up
An investment approach that starts with the individual company rather than macroeconomics or sector trends. We always begin with one question: is this a good business at a fair price? That answer drives the decision — not where interest rates are heading.
Bull market
A market that has risen at least 20 percent from its recent trough. Often linked to optimism, rising earnings and economic growth.
Business cycle
The recurring alternation between periods of economic growth and slowdown. Quality companies navigate cycles without jeopardising their operations.

C

CAGR (Compound Annual Growth Rate)
The average annual growth rate showing smooth growth over a period. Useful for comparing returns across different time horizons.
Capital allocation
How a company chooses to deploy its earnings: reinvestment, acquisitions, dividends or buybacks. A management team's track record of capital allocation is one of the strongest signs of quality.
Cash flow
The money flowing in and out of a company during a period. Positive cash flow means the company generates more money than it spends.
Competitive advantages
Characteristics that protect a company's profitability over time, such as strong brands, network effects, cost advantages or high barriers to entry.
Compounding
The effect of returns generating further returns. Over long periods, this can create exponential growth of invested capital.

D

DCF (Discounted Cash Flow)
A valuation method that converts a company's future cash flows into a value today. The core principle: a pound tomorrow is worth less than a pound today. Requires assumptions about growth, margins and discount rate — making it powerful but sensitive to inputs.
Distributing fund
A fund that pays out part of its returns in cash to unitholders instead of reinvesting. Suits investors who want ongoing cash flow from their savings.
Diversification
Spreading investments across multiple companies, sectors or geographies to reduce risk. If one holding underperforms, others can compensate.
Dividend yield
The dividend per share divided by the share price, expressed as a percentage. Shows what portion of the price is returned as dividends each year.
Drawdown
The maximum decline from a peak to a trough in a fund's value. Shows the largest temporary loss during a period.

E

Effective number of assets
A concentration measure showing how many equally-weighted holdings a portfolio is equivalent to. Penalizes portfolios where individual positions carry much more weight than the rest, regardless of the actual holding count.
Endowment insurance
An insurance-based savings wrapper that offers flat-rate taxation, similar to an ISK, but with the option to name a beneficiary.
EPS (Earnings Per Share)
A company's net profit divided by the number of outstanding shares. A fundamental measure of profitability per share.
Equity fund
A fund that primarily invests in equities. Provides stock market exposure through a single investment.
EV/EBITDA
Enterprise value divided by operating profit before depreciation and amortisation. A valuation measure that accounts for a company's debt, unlike P/E.

F

Fair value
Our estimate of what a stock should be worth, based on normalised earnings, cash flows and company quality. We invest only when the price is well below fair value.
Financial metrics
Quantitative measures used to analyse and compare companies. Common examples include P/E, EV/EBITDA, ROE and operating margin.
FIRE (Financial Independence, Retire Early)
A savings movement centred on building a capital base large enough for its returns to cover living costs, providing financial independence and the option to stop working early.
FOMO
Fear Of Missing Out. The fear of missing a price rally, which can lead to buying stocks without sufficient margin of safety. One of the most common traps for investors.
Free cash flow (FCF)
The cash flow remaining after a company has paid its operating expenses and capital expenditures. Shows the company's ability to generate surplus.
Fund management company
A company that manages one or more funds. The fund company is responsible for investment decisions, administration and regulatory compliance. Amos Value is managed by the fund company Atle Fund Management AB.
Fund NAV (Net Asset Value)
The fund's total assets minus liabilities, divided by the number of units. The price at which you buy or sell.
Fund rules
The legal document governing the fund's investment mandate, risk limits and other terms. Established by the fund company and approved by the Swedish FSA.
Fundamental analysis
Understanding a company from the inside out: business model, earnings power, competitive position, management quality and outlook. The foundation for distinguishing a good company from a good stock — they are not always the same thing.

G

GARP (Growth at a Reasonable Price)
An investment style that seeks companies with strong growth prospects at a price that does not fully reflect them. The basis of how Amos Value invests: quality companies bought when the market underestimates their long-term earnings power.

H

Holding period
The length of time an investor owns a security. Longer holding periods allow compounding to work and reduce the impact of short-term volatility on returns.

I

Index fund
A fund that tracks a specific stock index, such as OMXS30, without active investment decisions. Lower fees but no opportunity to outperform the index.
Information ratio
Excess return over a benchmark divided by tracking error. Shows how much excess return the manager earned per unit of active risk taken.
Intrinsic value
An estimate of what a company or asset is truly worth based on fundamental analysis, independent of the market price.
Investment horizon
How long an investor plans to hold a position. A long investment horizon amplifies compounding and reduces the significance of short-term volatility. Amos Value invests with a long-term horizon.
ISK (Investment savings account)
A Swedish account type with flat-rate taxation based on account value instead of capital gains tax. Popular for fund investing.

J

Jensen's alpha
A risk-adjusted performance measure that represents the average return above or below the Capital Asset Pricing Model prediction. Positive alpha indicates the manager has added value.

K

KID (Key Information Document)
A standardised document summarising the fund's objectives, risks, charges and historical performance.

L

Large cap
The largest listed companies, typically with a market capitalisation above EUR 1 billion. Generally more liquid and stable than smaller companies.
Liquidity
How easily an asset can be bought or sold without significantly affecting its price. High liquidity means quick trading with small price movements.

M

Management fee
The fee charged by the fund company for managing the fund. Covers the costs of analysis, administration and ongoing management.
Margin of safety
The difference between a company's estimated intrinsic value and its market price. A larger margin provides protection against unexpected events and increases potential returns.
Mid cap
Medium-sized listed companies, between small cap and large cap. Often a balance between growth potential and stability.
Mispricing
When a stock's market price fails to reflect the company's true value. Can arise from sentiment swings, short-term pessimism or overreaction to news. For the patient investor, mispricings are opportunities — not problems.
Moat
The structural characteristics that allow a company to defend its profitability year after year. Strong brands, network effects, high switching costs and cost advantages are common forms. We always look for evidence that the moat holds — and that it can widen.

N

Net asset value (NAV)
The value of a company's assets minus its liabilities. Central for analysing investment companies and property companies. A share trading below NAV is said to trade at a NAV discount.
Net debt
A company's interest-bearing debt minus cash. A negative figure means the company has more cash than debt, providing financial strength.
Nordic equity fund
An equity fund that invests in listed companies across the Nordic countries – Sweden, Norway, Denmark and Finland. The region is known for well-managed companies, strong corporate governance and stable markets, making it a favoured choice for long-term investors.
Normalised earnings
An estimate of what a company can earn under normal conditions, adjusted for temporary peaks and troughs. The basis for assessing sustainable profitability.

O

Operating margin
Operating profit as a percentage of revenue. Shows how much of a company's income remains after paying its operating costs.
Ownership concentration
Ownership concentration refers to how large a share of a company's stock is controlled by a small number of major shareholders, such as founding families or institutions. High ownership concentration can signal strong long-term commitment, which is often viewed as a positive quality indicator in Nordic equity analysis.

P

P/B (Price/Book)
The share price divided by book value per share. Shows how the market values a company's net assets. Below 1.0 means the stock trades below book value.
P/E (Price/Earnings)
The share price divided by earnings per share. A measure of how the market values a company's earnings.
Passive management
A strategy where the fund tracks an index without active selection of individual companies. The opposite of active management.
Portfolio construction
How a portfolio is assembled in terms of number of holdings, position sizing, sector allocation and risk management. The goal is to balance return potential against risk.
Portfolio turnover
How often a fund's holdings are replaced during a year. Low turnover means the manager holds companies for the long term, reducing transaction costs.
Prospectus
A legal document describing the fund's strategy, risks, fees and conditions in detail. More comprehensive than the KID.

Q

Quality investing
An investment style that prioritises companies with high and sustainable profitability, strong competitive advantages and capable management. Amos Value combines quality investing with value investing: the right company at the right price.
Quantitative screening
A systematic review of companies based on financial metrics such as profitability, cash flow, leverage and growth. Used to filter out interesting investment candidates.

R

Rebalancing
Adjusting a portfolio's composition back to desired weights. Done periodically or when allocations deviate from targets.
Return
The gain or loss generated by an investment over a given period, expressed as a percentage of the amount invested.
Reverse DCF
An analytical method where you start from a company's current share price and work backwards to determine what growth and profitability the market has already priced in. It gives the investor a concrete way to assess whether market expectations are reasonable or excessive.
ROE (Return on Equity)
Return on equity. Shows how profitable a company is relative to its shareholders' invested capital.
ROIC (Return on Invested Capital)
Shows how efficiently a company uses its capital to generate profits, including both equity and debt.

S

SFDR
Sustainable Finance Disclosure Regulation. An EU regulation requiring fund companies to report sustainability-related disclosures.
Share class
Different variants of the same fund, for example accumulating (reinvests dividends) or distributing (pays out cash). The investment strategy is the same. Amos Value A (Acc) is the accumulating share class, Amos Value E (Dist) the distributing one.
Sharpe ratio
Risk-adjusted return. Return above the risk-free rate divided by standard deviation. A higher value indicates better risk-adjusted performance.
SIX Portfolio Return Index (SIXPRX)
A total return index for the Stockholm Stock Exchange that includes dividends. The most common benchmark for Swedish equity funds.
Small cap
Smaller listed companies, typically with lower market capitalisation. Can offer higher growth potential but with higher risk and lower liquidity.
Standard deviation
A measure of volatility showing how much a fund's returns vary around their average. Higher standard deviation means higher risk.
Swedish equity fund
An equity fund that primarily invests in Swedish companies. Amos Value is a Swedish equity fund with a mandate to invest at least 80 percent in Sweden.

T

TER (Total Expense Ratio)
All costs in the fund expressed as a share of fund assets, including management fee and transaction costs.
Total return
The combined return from both price appreciation and dividends. Gives a more accurate picture of an investment's true result.
Tracking error
The standard deviation of the difference between the fund's and the benchmark's return. Shows how actively the fund deviates from the index.

U

UCITS
Undertakings for Collective Investment in Transferable Securities. An EU framework setting requirements on fund diversification, liquidity and investor protection.

V

Value fund
An equity fund that systematically invests in companies trading below their estimated intrinsic value. Amos Value is a value fund, but combines value investing with a requirement for quality and earnings growth.
Value investing
An investment philosophy based on the idea that markets sometimes misprice companies. The value investor looks for stocks trading below their intrinsic value and is willing to wait until the market recognises it. Benjamin Graham laid the foundations. Warren Buffett refined them.
Volatility
A measure of how much an asset's price fluctuates. High volatility means large price movements, both up and down.

W

WACC (Weighted Average Cost of Capital)
The blended cost of a company's debt and equity financing, weighted by their proportions. Used in DCF analysis to discount future cash flows to their present value.

Y

Yield curve
A graphical representation of interest rates for bonds with different maturities. Normally slopes upward. An inverted yield curve can signal an upcoming recession.

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