At Folionet, we believe that financial education is the foundation for making smart and secure decisions. For this reason, we have prepared a glossary with the most relevant concepts from the world of investing and global markets. This resource is designed so that our clients clearly understand the terms they will encounter on the platform and in their daily operations, strengthening their confidence and autonomy when investing. Knowing these concepts will allow you to make the most of the tools Folionet provides and take every step with security within the global financial ecosystem.
A stock that has been removed from a major exchange, such as the NYSE or Nasdaq, usually for failing to meet regulatory or financial requirements. Although they may continue to trade on Over-the-Counter (OTC) markets, these stocks typically have lower liquidity and higher risk; therefore, it is essential to trade them with caution.
A type of asset whose characteristics are a combination of common stocks and bonds. Investors who purchase them usually receive higher dividends than bonds and have capital priority when a company is liquidated. These instruments typically offer higher yields than bonds but significantly less than common stocks.
Instruments that allow investors with U.S. investment accounts to purchase shares of foreign companies that are not listed on U.S. exchanges. They are commonly available for stocks listed in Europe and Asia, for example.
Refers to the total market value of the investments that a financial institution manages on behalf of its clients.
A standard or index used as a reference to compare the performance of an investment.
Assets backed by real property. Those who invest in them can expect to receive income through dividend payments.
Essential products such as food, beverages, tobacco, household goods, and personal hygiene products.
A type of asset representing debt issued by a company to raise capital. When acquired by an investor, they receive a predetermined number of interest payments at a fixed or variable rate.
Bonds with a credit rating below BBB- (high-risk bonds) by major rating agencies like S&P and Moody's. These bonds may involve high risks of default by the issuer, price fluctuations, and/or illiquidity due to changes in credit quality or market conditions. Their market value could also suffer significant losses, especially during economic recessions, high volatility, or elevated interest rates.
A type of asset representing debt issued by a country's government to cover expenses and obligations. Bonds issued by the United States, for example, are considered very low risk as they are backed by the issuing government.
Refers to established companies with solid sales and global consumers, typically with an asset value exceeding $10 billion.
Refers to companies with a solid track record and steady sales that hold an important position in the local market, with an asset value between $2 billion and $10 billion.
Refers to modest-sized companies with steady sales serving a local market, with an asset value between $300 million and $2 billion.
When a company files for Chapter 11 under the U.S. Bankruptcy Code, it begins a court-supervised financial reorganization process. This does not imply the immediate closure of the company, but it does indicate significant economic difficulties. The shares of these companies are usually highly volatile and carry elevated risk.
Refers to companies engaged in the production of automobiles and components, durable consumer goods, apparel, consumer services (hotels, restaurants, and leisure), entertainment, and retail.
Refers to companies involved in the exploration, extraction, and processing of oil and gas for energy supply and other uses.
Refers to companies dedicated to the production of renewable energy and environmental protection.
A group of assets gathered under a single ticker symbol that trades like a regular stock. It can be a collection of stocks, bonds, or derivatives.
Refers to the risk level of a bond. These are considered to have a lower risk of default and receive higher ratings from credit rating agencies.
The process of raising capital by offering a company's shares to the public for the first time on a public exchange.
The ease with which an asset can be converted into cash without affecting its market price.
Financial instruments whose value is derived from the price variation of another asset, known as the "underlying asset." They can be very volatile due to the use of leverage, which can increase both risk and return.
The sum of all interest and dividend payments from a fund over the last 12 months, divided by the closing share price (NAV) of the last month, plus any capital gains distributed during the same period. It provides a clear idea of the yield the fund is currently paying.
The projected annual return of an investment based on the most recent dividend payments in the last 12 months. It is calculated by multiplying said dividend by the payment frequency of the fund and dividing it by the asset price.
The risk that affects the entire market or sector, not just a specific company.
Refers to companies that provide services, manufacture equipment, sell products, offer insurance, or perform other work related to the health field.
Refers to companies responsible for designing and manufacturing computer chips and related components.
Refers to companies that provide basic services such as water, sewage, waste management, electricity, and natural gas.
Refers to companies that offer banking, investment, insurance, or any other type of financial intermediation.
The difference between the purchase price (bid) and the sale price (ask) of an asset.
Refers to companies involved in the research, development, or distribution of technological products and services.
A type of fixed-income investment that generates interest income through pools of home mortgages. These are generally considered very secure as they are backed by the properties in case of default.
A measure of the variation in the price of an asset over a specific period.
