Use our glossary to search for definitions of some commonly used investment terms.

  1. A
  2. B
  3. C
  4. D
  5. E
  6. F
  7. G
  8. H
  9. I
  10. J
  11. K
  12. L
  13. M
  14. N
  15. O
  16. P
  17. Q
  18. R
  19. S
  20. T
  21. U
  22. V
  23. W
  24. X
  25. Y
  26. Z
  1. A

    Absolute return

    An investment strategy that aims to produce a positive return regardless of the direction of financial markets (such results are not, however, guaranteed).

    Accumulation units

    (Acc) Any interest earned or dividend paid to shareholders is automatically reinvested into the fund. This increases the value of the units held.

    Active management

    Where the fund manager seeks returns over and above the benchmark and sector. Through thorough research, the fund manager will select stocks he or she believes will provide the highest return on investment.


    An institution that performs the day to day administration of a collective investment scheme (apart from the investment management).


    a measure of performance that compares the realized return with the return that should have been earned (the benchmark) for the amount of risk borne by the investor. Simply stated, alpha is often considered to represent the value that a portfolio manager adds to or subtracts from a fund's return. A positive alpha indicates that the portfolio manager performed better than was expected based on the risk the manager took with the fund. A negative alpha means that the manager actually did worse than he or she should have given the return of the portfolio’s benchmark.

    Alternative Investment Market

    (AIM) A market for small, young and growing companies operated by the London Stock Exchange. The market provides an opportunity for companies to raise capital for expansion without the cost and regulatory burden of a full listing on the main market. As the regulations are less stringent, the shares are likely to be more volatile.

    Annual Management Charge

    (AMC) A fee paid to Jupiter for the management and administration of a fund accrued daily.

    Annual report

    A report, required by the Financial Conduct Authority and prepared by the fund manager, which includes the fund's investments, how it performed and financial information relating to the fund.  Short form versions are sent to unit holders as at the funds annual and six monthly accounting dates.  Long form annual reports are available on request.

    Asset allocation

    How a fund manager spreads the underlying investments of a fund. In most cases, the portfolio is divided across a range of assets such as stocks/shares, bonds, property or cash. The purpose of asset allocation is to reduce risk through diversification.


    Underlying investments of a fund such as stocks/shares, bonds or cash.


    Any company wishing to conduct investment business in the UK is required to be authorised under the provisions of the Financial Services and Markets Act 2000. This authorisation is granted by the Financial Conduct Authority, the regulatory body for the financial services industry.

    Authorised fund

    A fund that has been authorised by the Financial Conduct Authority for marketing to the public in the UK.

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  3. B

    Balanced fund

    A fund typically investing in both stocks/shares and fixed interest stocks or funds.

    Basic Rate Tax

    The most commonly paid rate of income tax.

    Bear market

    A period during which the stock market is generally expected to fall.


    A stock market index such as the FTSE All Share, against which a fund manager can compare his or her fund's performance.


    Beta is a measure of the volatility of a fund in comparison to the market as a whole. If a fund has a beta of less than one it is less volatile than the market, and its beta is more than one it will be more volatile.


    Governments and companies issue bonds in order to raise money. The bonds are issued with a promise to pay the money back at a fixed time along with interest at a fixed rate. Also known as fixed interest securities.

    Bottom up

    An investment approach in which a fund manager will pay a great deal of attention to analysing individual companies in terms of such factors as the strength of its management, growth prospects and operating models, to select companies for a portfolio. Market conditions and economic issues are taken into consideration but are of lesser importance.

    Bull market

    A market where share prices are rising and expected to rise further over the medium term.

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  5. C


    The initial investment before interest or capital growth.

    Capital gain

    When an investment is sold for a higher price than it was purchased.

    Capital Gains Tax

    (CGT) A tax paid on the net increase in value of an investment when the investment is sold and the gain exceeds your annual exemption (after deducting any losses and applying any reliefs), currently £10,900 (2013/14). The tax is currently charged at 18%. ISA investments are free of CGT.

    Capital growth

    An increase in the value of an investment.

    Citywire Fund Manager Ratings

    Ratings which track the performance of individual fund managers. Citywire calculates a Manager Ratio which reflects how much 'added value' in terms of outperformance against the benchmark the fund manager has delivered. Fund managers who achieve or exceed certain performance thresholds, based on their 36 month Manager Ratio, are assigned 'AAA', 'AA' and 'A' ratings. Citywire states that 'only a handful of managers receive a rating'.

    Closed-ended funds

    Like companies, closed-ended funds issue a fixed number of shares to the public in an initial public offering, after which, shares in the fund are bought and sold on a stock exchange. The price of a share in a closed-ended fund is determined by market demand as well as the funds underlying assets.

    Collective investment funds

    An investment where a group of investors pool their money into a fund such as a unit trust, which is then invested in a wide spread of stocks and shares and fixed interest securities. Investors receive units in the fund and the fund is managed by a fund manager who aims to achieve maximum returns based on the investment objectives and policy of the fund.

    Contract for Difference

    (CFD) A type of derivative instrument that generally provides an efficient way of securing exposure to the movement in price of an underlying share or index without owning the stock or physically investing in the index. Such instruments can be used with the aim of gaining a benefit from either increases or decreases of the value of the underlying asset.

    Contrarian strategy

    An investment style that goes against the tide in terms of current market trends. A contrarian fund manager will aim to buy assets that are performing poorly and then selling when they perform well to make a profit.

    Convertible bond

    A bond that can be converted into equity, i.e. a quantity of company shares at certain times during its life, usually at the discretion of the bondholder.


    Securities, usually bonds or preferred shares that can be converted into common stock. Convertibles are most often associated with convertible bonds, which allow bond holders to convert their creditor position to that of a share holder at an agreed upon price.

    Corporate bond

    A bond issued by a company in order to raise money. The bonds are issued with a promise to pay the money back at a fixed time along with interest at a fixed rate. These bonds often pay higher rates of interest than government bonds since the risk of default is higher.


    The coupon is the interest paid on a bond to the investor, regular payments are usually made at six monthly intervals.


    An institution or individual that exercises legal authority over financial assets and safeguards them for another individual or company.


    A type of stock that relies heavily on the business cycle and economic conditions. These are often within consumer goods sector and include both physical goods and services.

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  7. D

    Decile ranking

    A ranking in percentiles that are multiples of 10. For example, funds in the top decile are ranked in the top 10% of funds in their peer group.


    The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of the derivative.

    Deposit account

    A bank or building society account that earns a steady rate of interest in which your capital is secure (up to the Financial Services Compensation Scheme (FSCS) limits).


    A financial instrument the change in value of which is linked in some way to the movement in the price of one or more underlying instruments (e.g. individual securities, currency exposure or financial indices). Such instruments can be used to give exposure to, or to hedge against, movements in the price of the underlying asset in a more economical way than investing in the asset directly.

    Discretionary investment

    Where a fund manager has complete discretion (within the investments prescribed limits) as to where he or she invests clients' capital.


    The income paid out to investors from a unit trust in the form of interest or dividends.


    A strategy designed with the aim of reducing exposure to risk in a portfolio by combining a variety of asset classes which are unlikely to move in the same direction at the same time.

    Dividend yield

    The income a company pays out to its shareholders in the form of dividends, expressed as a percentage. It is calculated by dividing the dividend payment of a share by the current market price of a share.


    A share of a company's profit distributed to shareholders. Dividends provide an income in addition to any capital growth, and generally increase as the profitability of the company increases.


    A measure of the sensitivity of the price of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining rates mean rising bond prices.

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  9. E

    Economic growth

    An increase in an economy's ability to produce goods and services over time.

    Emerging market

    A financial market of a developing country with high growth expectations and typically a higher level of volatility.


    Another name for stocks or shares in a company.

    Equity exposure

    The proportion of a fund invested in stocks and shares.

    Ex-dividend date

    The date between a fund's accounting date and when it pays out its income. If an investor does not own units in the fund during this period, they will not be eligible for the income.

    Exchange Traded Fund

    (ETF) A fund that tracks an index or benchmark but trades like a stock on an exchange; i.e. changing price throughout the day as it is bought and sold.

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  11. F


    The USA adopted The Foreign Account Tax Compliance Act ("FATCA") within the US HIRE Act 2010.

    The below entities have registered with the IRS and been allocated a GIIN for the purpose of FATCA compliance.




    FATCA status







    Corporate entities  
    Jupiter Fund Management plc Registered Deemed Compliant Foreign Financial Institution DE6X7E.00000.LE.826
    Jupiter Investment Management Group Ltd Registered Deemed Compliant Foreign Financial Institution DE6X7E.00002.ME.826
    Jupiter Asset Management Ltd Registered Deemed Compliant Foreign Financial Institution DE6X7E.00003.ME.826
    Jupiter Unit Trust Managers Ltd Registered Deemed Compliant Foreign Financial Institution DE6X7E.00004.ME.826
    Jupiter Asset Management Bermuda Ltd Registered Deemed Compliant Foreign Financial Institution DE6X7E.00008.ME.060
    Unit Trusts - sponsoring entity for all Jupiter Unit Trusts    
    Jupiter Unit Trust Managers Ltd Registered Deemed Compliant Foreign Financial Institution: Sponsoring entity EQJYY0.00000.SP.826
    SICAV Range - The umbrella has a GIIN which is used for all sub funds    
    The Jupiter Global Fund SICAV Registered Deemed Compliant Foreign Financial Institution I83U14.99999.SL.442
    Jupiter Merlin Funds SICAV Registered Deemed Compliant Foreign Financial Institution Q2YTC1.99999.SL.442
    Jupiter South Asia Investment Company Registered Deemed Compliant Foreign Financial Institution 2DUZTI.99999.SL.480
    Investment Trust Companies    
    Jupiter Dividend & Growth Trust PLC Registered Deemed Compliant Foreign Financial Institution 5WYT1A.99999.SL.826
    Jupiter European Opportunities Trust PLC Registered Deemed Compliant Foreign Financial Institution G0YWMG.99999.SL.826
    Jupiter Green Investment Trust PLC Registered Deemed Compliant Foreign Financial Institution YIUUUQ.99999.SL.826
    Jupiter UK Growth Investment Trust Registered Deemed Compliant Foreign Financial Institution UIJ4NH.99999.SL.826
    Jupiter US Smaller Companies PLC Registered Deemed Compliant Foreign Financial Institution JVSYLV.99999.SL.826


    The manager of a fettered fund of funds can only invest in the funds of the investment house that employs him or her.

    Financial Adviser

    A professional individual or firm authorised by the Financial Conduct Authority to provide financial advice and sell investors financial products. Advisers can either be classified as ‘independent’ whereby they have access to the whole market, and ‘restricted’ where their recommendations will be limited to a selection of providers and products. The extent of this restriction varies and advisers are responsible for communicating the remit of their advice to their clients.

    Financial Conduct Authority

    (FCA)The Financial Conduct Authority is the UK regulator for the financial services industry.

    Financial exposure

    The amount that one stands to lose in an investment. Another term for risk.

    Financial Services Compensation Scheme

    (FSCS) An independent compensation fund available to UK Financial Services customers.


    Assets such as stocks, shares or bonds issued by financial institutions such as banks, building societies, insurance companies etc.

    Fixed interest

    An asset class which carries a fixed rate of interest, normally payable for a pre-determined period. Issuers of such investments can be governments, local authorities and corporations.

    FTSE 100

    An index of the 100 largest UK companies listed on the London Stock Exchange.

    FTSE 250

    An index of the 250 largest UK companies below the top 100 listed on the London Stock Exchange.

    FTSE All Share

    An index of all the UK companies listed on the London Stock Exchange.

    FTSE Small-Cap

    An index of the 500 smallest UK companies listed on the London Stock Exchange.


    A form of collective investment where an investors' individual or group money is pooled and invested in a wide spread of stocks and shares as well as fixed interest securities. Investors receive units in the fund and the fund is managed by a fund manager who aims to achieve maximum returns based on the investment objectives and policy of the fund.

    Fund of funds

    Funds comprising a portfolio of underlying Unit Trusts or Open-Ended Investment Companies (OEIC).

    Fund size

    The total value of assets held within a fund.

    Fund supermarket

    A company which enables investors to buy, sell and manage their investments with different fund management companies through a single account.


    The qualitative and quantitative information that contributes to the economic well-being and the subsequent financial valuation of a company, security or currency. By looking at the economics of a business, the balance sheet, the income statement, management and cash flow, investors are looking at a company's fundamentals, which help determine a company's health as well as its growth prospects.


    This is a contract to buy or sell a commodity or a financial instrument such as shares or an index, at a future date, at a fixed price which is agreed now.

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  13. G


    Gearing is a measure of financial leverage, or borrowing power. It shows the relationship between the company’s debt and total assets. A company that is highly geared could be considered higher risk than one where the debts are comfortably covered by the assets in issuance.


    Jupiter Global Intermediary Identification Numbers ("GIINs") as at 5 May 2014

    The USA adopted The Foreign Account Tax Compliance Act ("FATCA") within the US HIRE Act 2010.
    The below entities have registered with the IRS and been allocated a GIIN for the purpose of FATCA compliance.

     Entity IGA country   Global Intermediary Identification Number "GIIN"
     Corporate entities    
     Jupiter Fund Management plc   UK  DE6X7E.00000.LE.826
     Jupiter Investment Management Group Ltd  UK  DE6X7E.00002.ME.826
     Jupiter Asset Management Ltd  UK  DE6X7E.00003.ME.826
     Jupiter Unit Trust Managers Ltd  UK  DE6X7E.00004.ME.826
     Jupiter Asset Management Bermuda Ltd  UK  DE6X7E.00008.ME.060
     Unit Trusts - sponsoring entity for all Jupiter Unit Trusts    
     Jupiter Unit Trust Managers Ltd UK  UK  EQJYY0.00000.SP.826
     SICAV Range -  The umbrella has a GIIN which is used for all sub funds  
     The Jupiter Global Fund SICAV  Luxembourg  I83U14.99999.SL.442
     Jupiter Merlin Funds SICAV  Luxembourg  Q2YTC1.99999.SL.442
     Jupiter South Asia Investment Company  Mauritius  2DUZTI.99999.SL.480
     Investment Trust Companies    
     Jupiter Dividend & Growth Trust PLC  UK  5WYT1A.99999.SL.826
     Jupiter European Opportunities Trust PLC  UK  G0YWMG.99999.SL.826
     Jupiter Green Investment Trust PLC  UK  YIUUUQ.99999.SL.826
     Jupiter UK Growth Investment Trust  UK  UIJ4NH.99999.SL.826
     Jupiter Second Split Trust PLC  UK  DMENAV.99999.SL.826
     Jupiter US Smaller Companies PLC  UK  JVSYLV.99999.SL.826


    Bonds issued by the UK government. The bonds are issued with a promise to pay the money back at a fixed time along with interest at a fixed rate. Also known as fixed interest securities.

    Gross exposure

    This illustrates the total of the funds 'long' and synthetic 'short' positions in relation to the overall assets of the fund.  For example if the fund in 60% 'long' and 50% 'short' the fund is 110% Gross invested.

    Gross income

    Dividends and interest paid out before income tax is deducted.

    Growth fund

    A fund designed to provide capital appreciation by investing in companies with the potential to grow their earnings over time. Such companies typically reinvest earnings into the business to fund future expansion. The aim is that the shares in the selected companies will increase in value, allowing the fund to reap the benefits of capital gains.

    Growth investing

    An investment approach that seeks capital appreciation by selecting stocks which the fund manager believes will go up in price.

    Growth stocks

    Companies expected to grow their earnings over time.

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  15. H


    An investment made to reduce the impact of a fall in an asset price, usually undertaken as an offset position in a related asset. A Future is an example of a typical hedge.

    High Water Mark

    The uppermost value that a fund has historically reached. Often used to assess performance and fund manager compensation.

    High yield bond

    Bonds which offer high rates of interest. Generally a high yield bond has higher risk of default.


    The amount a fund has invested in a company or the amount of units/shares an investor owns.

    Hurdle Rate

    The level of return required to compensate for the risks incurred on an investment.

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  17. I

    I Class Shares

    I Class shares are typically aimed at institutional investors although some are available to investors and their advisers too.

    IA Sectors

    The Investment Association (or IA) classifies all of the funds on sale in the UK into a broad range of groups.


    Bond market indices used as benchmarks by investment professionals for fixed income research and performance evaluation.

    Income fund

    A fund that seeks a regular income in the form of dividends. Such funds invest in high-quality, cash-generative companies, judged capable of delivering sustainable growth in dividends over the long-term, and/or fixed interest securities. If the income is not needed immediately, investors can reinvest the income enabling them to buy more dividend paying units and accumulate a higher income for when they do eventually need it.

    Income investing

    An investment approach that seeks a regular income in the form of dividends by selecting stocks judged capable of delivering sustainable growth in dividends over the long term.

    Income tax

    A tax payable on any income received from earnings, investments and savings.

    Income units

    (Inc) Payout of any dividends or interest an investment makes, usually on set dates each year.

    Individual Savings Account (ISA)

    A wrapper in which you can place your savings and investments to protect them from some forms of taxation.

    Initial charge

    The sales charge payable by investors on the purchase of units in a fund. This charge covers expenses like administration and dealing costs.

    Institutional investor

    Large financial institutions that invest, such as pension funds, unit trusts or investment companies, and insurance companies.

    International Securities Identification Number

    (ISIN) A unique code identifying a fund or security. These are issued by a country’s National Numbering Agency.

    Investment Company

    Has similar objectives and characteristics to unit trusts but like companies, has a fixed share capital and is listed on the London Stock Exchange. Investors are able to buy shares in investment companies openly on the stock market. The money raised from the sale of shares is used to buy a range of underlying investments.

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  19. J

    Junk bond

    A high-risk bond with a low credit rating. These bonds often offer a high yield reflecting the increased risk of the issuer defaulting.

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  21. K

    Key Investor Information Document (KIID)

    A document which must be offered to an investor before purchase. It includes important information about the fund including risk factors and details of charges.

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  23. L

    Large Cap

    Refers to stocks issued by companies with a large market capitalisation, generally the bigger, blue-chip companies within a given market. Definitions based on market cap value can vary.

    Launch date

    The date on which a Unit Trust starts investing in assets and is introduced to the marketplace.


    London Interbank Offered Rate - An interest rate used to determine at which banks can borrow from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers' Association. It is calculated as an average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between one night and one year.

    Lipper Leaders

    Scores which have been developed to guide investors and their advisers to select funds that best suit the investor's individual needs. Funds awarded Lipper Leader status have excelled when compared to similar funds. Lipper's scoring system is built on three years of historical performance and is based on two main elements: 'preservation', the ability of the fund to preserve capital, even during any market downturn and 'consistent return', the ability of a fund to provide consistently superior returns when compared to similar funds. Both measures are scored on a 1 to 5 basis (with 5 being the highest). Funds that score 5 for either measure are awarded 'Lipper Leader' recognition.


    Liquidity is the degree to which an asset or security can be bought or sold in the market without affecting the asset’s price and/or the ability to easily convert an asset to cash. Money (in the form of cash) is the most liquid asset.

    Listed company

    A company whose shares can be bought or sold on a stock exchange.

    Long only

    An investment strategy that involves the purchase of stocks/ shares and other securities with the aim of generating capital gains and income for positive performance of those assets.

    Lump sum

    An amount of money paid as a single payment instead of periodic payments.

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  25. M

    Management group

    The name of the fund management house that runs and/or promotes funds.

    Market Capitalisation

    (Market Cap)This figure is used to determine a company's size. It is calculated by multiplying the number of a company's shares by the current market price per share. Companies are generally classified as large, mid or small cap.


    A finite period of time during which a financial instrument such as a bond remains outstanding – after this time the principal is paid with interest and the instrument ceases to exist.

    Medium Cap

    (Mid Cap) refers to stocks issued by companies with a medium market capitalisation, generally those companies that occupy the middle ground between large and small-cap. Definitions based on market cap value can vary.

    Money Market

    An area of the market often used for short-term borrowing and lending though the trading of financial instruments with high liquidity and very short maturities.


    Morningstar analysts assign the ratings on a scale with three positive ratings of Gold, Silver and Bronze, a Neutral rating and a Negative rating. Morningstar Medalists—whether they’ve received a Gold, Silver, or Bronze rating—are funds that their analysts believe will perform better over time when compared to similar investments.


    An investment research firm that provides risk and performance analytics and governance tools and is probably most well-known for publishing a range of indices available to the public. MSCI is a publicly traded company on the New York Stock Exchange.

    Multi-Manager Fund

    An investment product which typically bundles together several funds into a single investment. The funds in which the multi-manager invests may invest across a range of sectors and regions and asset classes, depending on the fund’s remit.

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  27. N

    Net Asset Value

    (NAV) The total value of a company or fund less its liabilities. Net asset value per share is calculated by dividing this figure by the number of ordinary shares/units in issue.

    Net exposure

    This illustrates the difference between the 'long' and 'short' positions in relation to the overall assets of the fund. For example if the fund has 60% exposure to 'long' positions and 50% exposure to 'short' positions the fund is 10% 'net long'.

    Net income

    Dividends and interest paid out after income tax has been deducted.

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  29. O

    Offshore portfolio

    A fund established outside the UK, which is not registered for sale to individuals in the UK.

    Open ended fund

    A fund whose number of units can be increased or decreased according to demand. Unit trusts and OEICs are examples of open-ended funds.

    Open Ended Investment Company (OEIC)

    An alternative structure for a collective investment scheme, similar to unit trusts, but constituted as companies rather than trusts.

    Over the counter (OTC)

    A trade in financial instruments between two parties which does not make use of the facilities of recognised exchange.


    When a portfolio or fund holds a particular asset in excess of its representation within a comparable index or benchmark it is said to be ‘overweight’. Active fund managers use this strategy where they believe these assets could generate superior returns.

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  31. P

    Passive funds

    An investment strategy that aims to match the performance of a stock market index through tracking its progress by buying and selling shares in the same proportions as the index. These funds are also known as tracker funds or index (tracker) funds.

    Pay date

    The date on which a dividend is paid to shareholders / unitholders.

    Paying Agent

    One who accepts payments from the issuer of a security and then distributes the payments to the holders of the security. For example, in the case of shares a paying agent receives dividend payments which are then distributed to shareholders. In bonds, the paying agent receives interest payments (i.e. coupon) which it then distributes to bondholders.


    The results of an investment over a given period of time.


    A collection of investments held by an institution or an individual.

    Preference shares

    Shares with dividends that are paid to shareholders before ordinary share dividends are paid out. In the event of a company bankruptcy, preferred stock shareholders have a right to be paid company assets first. Preference shares typically pay a fixed dividend, whereas ordinary shares do not. And unlike ordinary shareholders, preference share shareholders usually do not have voting rights.


    A legal document giving full details of a fund so investors can make an informed investment decision.

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  33. Q

    Quartile ranking

    A ranking in percentiles that are multiples of 25. For example, top quartile funds are ranked in the top 25% of funds in their peer group, while second quartile funds are ranked between 26% and 50%.

    Quoted company

    A company whose shares can be bought or sold on a stock exchange.

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  35. R

    Recovery shares

    Shares which have fallen in value but are thought capable of returning to their former price.

    Redemption date

    The repayment date/maturity date for bonds and other fixed interest securities.

    Reinvestment of income

    Income from a fund reinvested to purchase further units to increase the value of the holding.

    Retail investor

    A private investor (ie. member of the general investing public) who buys units in a fund for his or her personal portfolio.


    The amount of capital growth or income an investment generates.

    Risk profile

    An assessment of the degree to which an investor is prepared to accept losses at the expense of potential gain.

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  37. S


    A term used to differentiate investments from each other by way of country, market or prime source of business. The Investment Association divides unit trusts and OEICs into a variety of sectors to keep together funds of a similar type. Investors can then compare funds with similar objectives and investment strategies.

    Sector weighting

    The proportions of a fund held in industry sectors.


    A term used to describe a number of financial instruments; stocks, shares and bonds for instance.


    Stock Exchange Daily Official List - A code, comprised of seven alphanumeric characters, assigned to all securities on the London Stock Exchange and other UK exchanges as a unique identifier.

    Share Classes

    Some funds offer different types of shares, known as classes. These generally have different fees, charges and voting rights.


    The owner of shares in a company.


    A stake in the ownership of a company. Also known as equities.

    Short selling

    Short selling involves the sale of an asset that has been borrowed from a third party with the intention of buying the asset at a lower price at a later date. Regulated funds are not allowed to short sell the actual stock. Instead, short positions are created synthetically using derivatives written by an authorised counterparty, typically an investment bank. The strategic use of derivatives contracts gives the fund manager the potential to make money in both falling and rising markets. However, it introduces the risk that these funds may lose money in both rising and falling markets.


    (Société d'Investissement à Capital Variable) A type of open-ended fund widely used in Europe. The fund’s value will vary depending on the number of investors in it. Shares are bought and sold based on the fund’s net asset value.

    Small Cap

    Refers to stocks issued by companies with a small market capitalisation, generally the smaller or start-up companies within a given market. Definitions based on market cap value can vary.

    Socially Responsible Investment (SRI)

    Investment in companies providing solutions to environmental and social issues. Jupiter's SRI team focus on six green investment themes - clean energy, water management, green transport, waste management, sustainable living and environmental services - when selecting companies in which to invest.

    Special Situations

    Particular circumstances involving a security that would compel investors to trade the security based on the special situation, rather than the underlying fundamentals of the security or some other investment rationale. An investment made due to a special situation is typically an attempt to profit from a change in valuation as a result of the special situation, and is generally not a long-term investment.

    Split Capital Investment Trust

    An Investment Company with a limited life and a wind-up date set at launch. This means that at a specified date the company will need to realise a specified value from the underlying investments to distribute to the shareholders. Due to its structure the company is able to issue more than one type or class of share and each is designed to meet different investors’ needs. Each class of share follows a particular order of entitlement to income earned by the company during its life, and at wind up to capital paid from the assets of the company.

    Stock exchange

    A market where stocks and shares are bought and sold.

    Stock picking

    A situation in which an analyst or investor uses a systematic form of analysis to conclude that a particular stock will make a good investment and, therefore, should be added to his or her portfolio. This is done as opposed to tracking the index.

    Stock selection

    The process by which a manager selects favoured stocks or shares for a portfolio.


    A contractual agreement between two parties to exchange future cash flows (or profit/ loss) resulting from two different assets according to a pre-arranged formula. Swaps can be contracted for stocks and shares, currencies and commodities. For example one party may contract to exchange the future profit or loss from an equity share in return for the interest on a cash balance of equivalent value.


    When an investor transfers his or her investment from one unit trust to another with the same provider.

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  39. T

    Tax efficient investment

    Investments that offer tax relief on contributions, income or capital gains.

    Tax year

    The 12-month period commencing 6 April and ending 5 April of the following year.

    Tied agent

    A Financial Adviser who can only sell products from one company, such as a high street bank.


    An investment approach where the fund manager bases portfolio construction on the managers view of the general economic outlook. Holdings likely to benefit from the current environment are then selected for the portfolio.

    Total return

    The return on an investment which includes both capital appreciation and reinvested income.


    The department responsible for issuing all US government bonds. Also used to refer to the assets issued by the department.


    A trustee oversees the fund manager's activities and must be independent of the fund manager. He or she acts in the interests of the unitholders and looks after the assets on their behalf, ensuring the fund is invested according to its investment objectives and that the fund manager is complying with regulations.

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  41. U

    Underlying funds

    The individual funds that make up a portfolio within a fund of funds.

    Undervalued stock

    Shares priced below their perceived value.


    When a portfolio or fund holds less of particular asset than its comparable index or benchmark it is said to be ‘underweight’. Active fund managers use this strategy where they believe excluding these assets could generate superior returns.

    Unit Trust

    A type of open-ended investment fund, set up under a trust deed whereby the investors are effectively the beneficiaries under the trust. The underlying value of the fund’s assets is always directly represented by the total number of units issued multiplied by the unit price (less the transaction or management fee charged and any other associated costs).

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  43. V


    Volatility is the relative rate at which the price of a security moves up and down. If the price of a stock moves up and down significantly over the period of measurement it is said to have high volatility. If the price moves smoothly upwards or downwards over the period it is said to have low volatility, and in the extreme if the price movement leads to a straight line progression over the period it has zero volatility.

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  45. W


    Tax breaks that an investor can ‘wrap’ around their investment, so that they can are sheltered from paying some or all tax on it. The most common tax wrappers are ISAs and pensions.

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  47. X

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  49. Y

    Yield to Maturity (YTM)

    The rate of return anticipated on a bond if it is held until the maturity date. YTM is considered a long-term bond yield expressed as an annual rate.

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  51. Z

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