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We hope you find this glossary useful and easy to use.
While we make every effort not to use jargon within our market commentaries and updates, some of our literature will require the use of more technical terms than others. This glossary has been created to help you better understand these terms.
Please be aware that while we have made every effort to describe the terms as accurately as we can, these descriptions are not definitive and they may differ from other interpretations used.
Otherwise known as a simple return, this is the performance or return that a bond, fund or stock achieves over a stated period of time. Usually expressed as a percentage, the figure details the increase or decrease that the asset has achieved.
7IM refers to the accumulation phase as the stage in your life when you are growing or accumulating a pot for future goals e.g. retirement. It is the opposite of the decumulation phase, when you are drawing on those savings.
With accumulation units, income generated by the funds is retained within the fund so, although you still have the same number of units, the price of each unit increases and so the overall value of your holding increases.
|Active Manager / Management||
This is where the fund manager 'actively' selects which individual bonds, funds or stocks to invest in. Using a variety of processes that are often largely specific to that individual fund manager, he/she will choose a smaller number of holdings to try and outperform the benchmark or index.
|Additional Permitted Subscription / APS||
If your spouse dies and has an Individual Savings Accounts (ISA), the Additional Permitted Subscriptions allows you (as the surviving spouse or civil partner) to make additional subscriptions to an ISA in addition to their own annual ISA limit. It is not dependent on inheriting the money or investments held within the ISA.
Adventurous is the riskiest of the 7IM risk profiles. As its name suggests, it is for investors who are willing to accept more risk to achieve a bigger return over the long term.
This is the measure of the performance that is over and above the performance of the benchmark against which a fund is gauged and is achieved by a fund manager as he/she actively manages the fund.
We generally refer to Alternatives as any asset that is not a bond or a stock. They include (for example) commodities, hedge funds and property, but can also include art, coins and stamps.
The annual allowance refers to the limit against which you can receive income, make capital gains or save before tax is payable.
The annual limit refers to the maximum amount up to which you can subscribe to a tax wrapper such as an ISA or SIPP.
|Annual Management Charge / AMC||
This charge is taken by the fund manager and deducted directly from the fund to cover ongoing management. The Ongoing Charges Figure / OCF includes the AMC as well as other costs involved in running the fund.
An annuity is a product that gives you a guaranteed income for the rest of your life or for a fixed number of years. Pension savings don't necessarily do this and so one option is to buy an annuity from an insurance company. There are different types of annuities and a diverse set of providers offering up a variety of options.
This is a component or security that has a commercial or exchangeable value and that is owned by someone or some organisation. Assets are the collective noun for the investments i.e. bonds, cash, futures, property, stocks, etc. that are held in a portfolio.
This is term used to reference the category of individual components or assets that are held in a portfolio or that are available on the market for investment purposes.
A measurement tool that looks to assess the performance of a fund manager. It assigns, or attributes, where performance has come from or been affected to determine whether performance is due to luck or skill.
You should be aware that the value of investments may go up and down and investors may get back less than they invested originally.