Exchange Traded Funds (ETFs) Glossary

Category: Large Cap ETFs

Some of the terms used in ETFs trading:

P/B ratio - Average ratio of price to book value of stock in an ETF, weighted by their representation.

P/E ratio - Average ratio of price to annualized earnings of stocks in an ETF, weighted by their representation.

Standard deviation
Measure of fund volatility in percentages. Standard deviation measures the average variability of the fund's returns over a time period. Stable investments like money market funds have standard deviations near zero, while high-risk equity funds often have a much higher one. A standard deviation of 10 means approximately 68% of the time a fund will be within 10% of its mean (average) price.

Sharpe ratio
A risk-adjusted measurement of fund performance. Sharpe ratio is calculated by dividing the excess return of a fund over the risk-free rate (Treasury bonds) by its standard deviation. The higher the Sharpe ratio, the better a fund's risk-adjusted performance.

ETFs within the "Large Cap ETFs" category (including subcategories):