Glossary

The debts of a company expressed as a percentage of its equity capital. If a fund is geared it means that it has the ability to borrow money and therefore take advantage of greater investment opportunities. Therefore it has the ability to benefit when ano

Gilts are bonds issued by the UK Government which generally pay a fixed rate of interest for a set period of time. Therefore, you know at the time of purchasing the bonds what income you are going to receive for the life of the bond. The UK Government als

Global Fund Analysis is a widely recognised company that conducts in-depth research into top performing offshore funds. Global Fund Analysis' ratings are based on their views of the funds' managers. Rating range from 1 to 5 stars - 5 stars being the top r

An economic trend where inflation and growth are considered neither too high nor too low. Refers to the porridge in the fairy-tale which is neither too hot nor too cold.

A fund whose main objective is capital appreciation. Contrasts with an income fund where the main aim is to provide higher than average income in the form of a dividend payment.

Annuity that is guaranteed to make payments for a minimum period even if the annuitant dies during that period. Payments continue after that period if the annuitant is still alive.

One of many different types of alternative investment funds, most of which pursue a total return strategy and usually charge a performance fee in addition to annual management charges and initial fees. While some funds may pursue conservative or market-ne

Protecting an existing position or commitment by using another investment (e.g. a future or option) to cover adverse market movements.

This term can be used to describe the amount of units or shares an investor owns, or the amount a fund has invested in a particular company.

Date by which income attributable to units in authorised trusts must have been computed and dispatched to the holder.

See Flat Yield.

Some UK investment trusts issue more than one type of share. They are called split-capital investment trusts and they form about 10% of the whole investment trust market. The simplest 'split' is divided between capital and income shares. The capital share

An Independent Financial Adviser (IFA) can be a single person or a small or large firm. These advisers can offer you a full range of products from all the financial services companies.

The indicator of the value of a sector of shares in a market. For example, the most common index in the UK is the "Footsie" (the FTSE 100) which reflects the performance of the top 100 (by market capitalisation) UK companies' shares.

Unit trusts which track the performance of an index. This is usually carried out by either investing in the shares comprising the index or by buying a sample of shares making up the index or a derivative based on the likely performance of the index. The v

A term used on performance charts. For ease of comparison, a fund's performance is shown against its benchmark index or indices starting on a particular date at 100.

This is the sales charge payable by the investor on the purchase of shares in a fund.

A European Union Directive with the objective to harmonise standards of regulation and allow firms established in any EU member state to conduct investment business in any other EU state.

A company whose sole function is to invest in the shares of other companies.

A non-investment grade bond issued by a company or sovereign borrower. Standard & Poor's investment grade starts at BBB-. With a low or non-existent rating, firms raising money in the bond markets will have to pay a far higher yield than investment grade

The duty to ascertain sufficient information about a customer to enable suitable advice to be given.

The price at which the last trade was executed; after market close, this is the closing price.

The start of a unit trust, investment trust or mutual fund.

The London International Financial Futures and Options Exchange. Market place for trading derivatives on financial instruments and soft commodities such as coffee and sugar.

A purchase or redemption fee charged by a unit trust or mutual fund.

See Gearing