Glossary

Investment & fund

UCITS — An "Undertaking for Collective Investment in Transferable Securities": the most tightly regulated European fund category, with statutory rules on diversification, liquidity and custody. Investors acquire shares in the fund — not the securities the fund holds.

NAV (net asset value) — The value of one fund share: the fund's assets minus liabilities, divided by the number of shares. For QI Global Guarded Equity it is calculated every banking day.

Sales prospectus — A fund's legally binding document containing all investment principles, costs and risks. Subscriptions are made exclusively on its basis.

Key information document (PRIIPs KID) — A legally required short document (three pages) presenting a product's risk indicator, costs and scenarios in a standardised, comparable format.

ISIN / WKN — Internationally and nationally unique identifiers of a security or fund share.

Entry fee (Ausgabeaufschlag) — A one-off charge when buying fund shares, calculated as a percentage of the amount invested.

Performance fee — A success-based remuneration of the fund management. QI Global Guarded Equity charges none.

Actively managed — The portfolio is steered by deliberate investment decisions rather than passively tracking an index. QI Global Guarded Equity is actively managed, without reference to a benchmark index.

Instruments & mechanics

Index future — An exchange-traded forward contract on an equity index. It replicates the index's performance without buying the individual stocks — but ties up only part of the capital (see leverage).

Put option — The right to sell an underlying at a fixed price. If the market falls below that price, the option gains value — it works like insurance against price declines, at the cost of an ongoing premium.

Strike — The exercise price fixed in an option, e.g. "90%": the hedge takes effect when the index falls below 90% of its starting level.

Leverage — Derivatives such as futures and options move large market positions with little capital deployed. Market movements therefore have a disproportionate effect — losses are amplified just like gains.

OTC ("over the counter") — Transactions concluded directly between two parties rather than on an exchange. They are more flexible but carry counterparty risk.

Duration — A measure of a bond's sensitivity to interest rates. Short duration means interest-rate changes have comparatively little effect on the price.

Drawdown — The loss in value from an investment's last peak to the subsequent trough — the measure of "how deep it went in the meantime".

Volatility — The extent of an investment's fluctuations in value. High volatility means large swings both up and down.

Risk terms

Market risk — The risk that the value of an investment falls with the general market.

Counterparty risk — The risk that the counterparty of a transaction (especially OTC) fails to meet its obligations.

Interest-rate risk — The risk that rising rates reduce the price of bonds.

Model risk — The risk that a quantitative model misrepresents reality. The QI Equity Guard's AI signal learns from historical data; it can misjudge market phases, so that hedges are established too early, too late or in an unsuitable size.

Technology & data

AI signal model — The model developed by QI evaluates macro, market and sentiment data and estimates the current drawdown risk per equity index. When that risk exceeds a threshold, it triggers additional hedges and sizes them. It produces probability estimates, not certain predictions — its limits are described by model risk.

Machine learning — Methods by which computers learn patterns from data instead of following fixed rules. Supervised: learning from examples with known outcomes. Unsupervised: independently detecting structure in data.

Ensemble models — Combining several independent models into one overall estimate; errors of individual models carry less weight.

RNN (recurrent neural network) — An AI architecture for time-ordered data (sequences), such as price series: it takes into account what happened before.

Alternative data — Data sources beyond classical financial reporting, e.g. supply-chain, payment or sentiment data, which can indicate economic developments before they appear in official figures.

Terms for institutional investors

The following terms come from the regulatory frameworks of institutional investors and address the respective specialist functions:

Depot A — A bank's own book: securities the institution holds for its own account.

CRR — The European Capital Requirements Regulation: governs how much own capital banks must hold against their investments.

SCR — Solvency Capital Requirement: the risk capital insurers must hold for their investments under Solvency II. "SCR-efficient" means: as much market exposure as possible per unit of risk capital consumed.

AnlV — The German Investment Ordinance (Anlageverordnung): limits how pension funds and smaller insurers may invest their guarantee assets (including via the risk-capital quota).

IORP II — The EU directive for occupational pension institutions: requires, among other things, an own-risk assessment and documented risk management.

TPT (tripartite template) — A standardised data format in which funds deliver their position data to insurers and pension institutions (look-through for Solvency II/AnlV).

LDI (liability-driven investing) — An investment approach oriented to liabilities (e.g. pension promises) rather than a market index.

IAS 19 — The international accounting standard for pension obligations in corporate financial statements.

MiFID II — The European markets in financial instruments directive; among other things, it distinguishes retail from professional investors and governs investor protection in distribution.

BaFin — The Bundesanstalt für Finanzdienstleistungsaufsicht, Germany's financial supervisory authority.