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Absolute return: The total return of an asset, portfolio or fund over a given period of time OR an investment approach that attempts to achieve a return which is not benchmarked against an index.
Units of a fund in which any interest earned or dividends paid are automatically reinvested into the fund.
Where a fund manager actively selects investments for a portfolio with the goal of performing better than its benchmark index.
Active Share is a measure of the percentage of stock holdings in a portfolio that differs from the benchmark index.
An institution that performs the day to day administration of a collective investment scheme (apart from the investment management).
A measure of fund performance that compares the return of a fund with that of its benchmark, taking account of the risk taken by the fund. Alpha is often considered to represent the value that a fund manager adds to or subtracts from a fund’s return.
A market for small, young and growing companies. AIM is operated by the London Stock Exchange and provides an opportunity for companies to raise capital without the cost and regulatory burden of a full listing on the main market.
A report prepared by the fund management company which includes details of a fund’s investments, how it performed and financial information relating to the fund. Long form annual and half-yearly managers’ reports are available on request.
How a fund manager spreads the investments of a fund, for example between different industry sectors, countries or even between different kinds of investment such as shares and bonds (depending on what is appropriate for the remit of the fund). The purpose of asset allocation is to improve risk-adjusted returns through diversification.
A wide category of investment e.g. shares, bonds, cash, etc where a market exists for the objective of trading these assets.
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.
A fund that has been authorised by the Financial Conduct Authority for marketing to the public in the UK.
A fund that has been authorised by the Hong Kong Securities and Futures Commission (HKSFC) for marketing to the public in Hong Kong.
A fund typically investing in both stocks/shares, bonds or funds.
The interest rate at which the Bank of England lends to financial institutions.
An index of securities against which an investment trust can compare performance.
Beta is a measure of the volatility of a fund’s returns in comparison to the performance of the market as a whole. If a fund has a beta of less than one it is less volatile than the market, while a beta of more than one means it is more volatile.
A bond future is a contractual obligation in which the contract holder agrees to purchase or sell a bond on a specified date at a predetermined price. This type of contract can be purchased on a futures exchange market and the prices and dates for the future are determined at the time of purchase of the contract.
A period during which the stock market rises, or is expected to rise.
When an investment is sold for a higher price than it was purchased.
The different types and amounts of shares a company may have.
A measure of the total amount of greenhouse gasses, primarily carbon dioxide, released into the atmosphere.
Means cash flow return on investment.
A commodity is a raw material that can be bought or sold, including industrial items such as iron or oil, as well as agricultural items like milk or coffee.
A share of ownership of a company, often with voting rights.
A portfolio that holds only a relatively small number of investments.
Where shareholders are offered an opportunity after a fixed period of time to wind-up a company.
A type of derivative instrument that generally provides a way of gaining 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.