Agency MBS: Mortgage bonds created by a quasi-government agency, like Fannie Mae or Freddie Mac.
Aircraft ABS: Securities that allow investors to receive payments from an aircraft lease’s income stream.
CLOs: A collateralized loan obligation is a diverse bundle of loans that allow investors to choose a different level of risk and potential reward.
CMBS: Bonds secured by mortgages on commercial real-estate rather than residential real estate, like a loan to purchase an office building in Manhattan.
Distressed Investing: Investment opportunities issued by companies that are close to (or going through) bankruptcy. These assets are often at a reduced value, but because of their implicit risk, they offer investors the potential for high returns.
Emerging Market Stocks: Shares of companies located in developing countries—often Brazil, Russia, India, China, and South Africa.
Growth Stocks: Shares of companies that are expected to grow and outpace average counterparts.
Government Bonds: When the government borrows money from investors to support government spending.
High-yield Bonds: A bond that pays a high interest rate, while also carrying a higher credit risk than investment-grade corporate bonds
Infrastructure: Investment in infrastructure initiatives like building railways, airports, hospitals, or toll roads.
Investment Grade Corporate Bonds: Issued by highly creditworthy companies that, in theory, pose high likelihood of paying back its investors what it borrowed. Due to the safety of these bonds, they usually have a lower return than their riskier counterpart, the high-yield bond.
Leveraged Loans: Loans that are extended to companies with a considerable amount of debt and/or a less favorable credit history. Because the companies have a higher risk of default in a lender’s eyes, they have to pay higher interest rates, which can translate to higher payments for the investor.
MLPs: A master limited partnership is a publicly traded entity taxed as a partnership. It combines the tax benefits of a partnership with the liquidity of publicly traded securities. Their investments can often include the extraction of minerals and real estate.
Merger Arbitrage Strategy: Investing in stocks that are likely acquisition targets in the near future—the strategy looks to take advantage of opportunities that can arise in the case of a merger.
Non-Agency MBS: Mortgage bonds created by a private entity, like a financial institution.
Private Equity: A direct investment in a private company.
Real Estate: Real estate investment trusts. They’re similar to mutual funds in that they pool investor’s money to invest directly in real estate, mortgages, or both.
Value Stocks: Shares in companies that tend to be undervalued when compared to their earnings—as Benjamin Graham called it, “Buying a dollar for fifty-cents.”
Whole-Business ABS: Securities that allow investors to receive payments from a company’s (or even a specific department’s) income stream, like receiving franchise fees from a national pizza chain.