Emerging Markets in an Upside Down World: Challenging Perceptions in Asset Allocation and Investment

Glossary

Asset class

A grouping of financial securities (assets) with similar characteristics.

BIS

The Bank for International Settlements (BIS), which serves as a bank for central banks, helping foster both international co-operation and monetary and fiscal stability of individual central banks.

Bonds

A bond is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest (the coupon) and to repay the principal at a later date (the maturity). Interest is usually payable at fixed intervals, typically semi-annual or annual. The ownership of the bond can be transferred in the secondary market.

Brady bond

Brady bonds were dollar-denominated Eurobonds issued in sovereign debt restructurings in exchange for existing debt – mostly distressed short-term bank loans. They were issued mostly by Latin American governments from the late 1980s in accordance with national Brady plans (named after then US Treasury Secretary Nicholas Brady). A Brady plan also entailed new official lending to the country, conditional on macroeconomic and structural reforms.

Bretton Woods

Bretton Woods in 1944 was the setting for the construction of a new global monetary architecture that included the initiation of the World Bank and the IMF.

BRIC

The term BRIC is an acronym for four major emerging market economies: Brazil, Russia, India and China.

Call option

A call option gives the holder the right, but not the obligation, to buy an agreed ...