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B

Basis point

One-hundredth of one percentage point, or 0.01 per cent. Therefore 1.0 per cent equals 100 basis points. Basis points are an easy way to state small differences in yield. For example, a return of 6.0 per cent is 50 basis points greater than a return of 5.5 per cent.

Bear market

A prolonged decline in the prices in stocks, bonds, commodities or any other asset class. A bear market is usually brought on by declining or poor market fundamentals.

Benchmark

A standard against which the performance of a fund or investment can be measured.

Beta

Beta (Β) is a measure of the volatility of an investment in relation to a market index or benchmark. A beta of 1.0 indicates that the fund will exhibit volatility similar to the market's. A beta of less than 1.0 indicates less-than-market volatility and a beta of more than 1.0 indicates more-than-market volatility. In essence, beta reflects how sensitive the returns of an investment are to the market's movements.

Bottom-up investing

An approach to investing which seeks to first identify well-performing individual securities before considering the impact of economic trends in the general economy when making an investment decision.

Bull market

A sustained rise in the prices in stocks, bonds, commodities or any other asset class. A bull market is usually brought on by improving or positive market fundamentals.

Buy the index

Purchasing an investable index fund as opposed to an actively managed fund.