Investment Management Glossary of Terms | Brown Brothers Harriman | BBH

Investment Management Glossary of Terms

BBH IM GLOSSARY

Brown Brothers Harriman & Co.

Investment Management

IM Glossary of Terms
2023

Margin of Safety for Equity

With respect to equity investments, a margin of safety exists when we believe there is a significant discount to intrinsic value at the time of purchase.

Margin of Safety

With respect to fixed income investments, a margin of safety exists when the additional yield offers, in BBH's view, compensation for the potential credit, liquidity and inherent price volatility of that type of security and it is therefore more likely to outperform an equivalent maturity credit risk-free instrument over a 3-5 year horizon.

Credits

Obligations such as bonds, notes, loans, leases and other forms of indebtedness, except for Cash and Cash Equivalents, issued by obligors other than the U.S. Government and its agencies, totaled at the level of the ultimate obligor or guarantor of the Obligation.

Intrinsic Value

BBH's estimate of the present value of the cash that a business can generate and distribute to shareholders over its remaining life.

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