A
Any income earned on this type of unit is added to the price of your units (no income is distributed), increasing the value of your holding, but leaving the number of units held unchanged.....
read more >>AIM (Alternative Investment Market) is the London Stock Exchange's international market for smaller sized companies. Businesses range from venture capital-backed start-ups to mature organisations loo....
read more >>A measure of the excess return of a portfolio relative to the benchmark, on a risk adjusted basis. It can be used to help determine if a portfolio is earning the proper return for its level of risk. I....
read more >>A fee paid to the fund manager once a year which service and administration fees.It is calculated daily at the point of valuation. The AMC forms part of the total expense ratio (TER) of a fund.....
read more >>Describes how your money is invested in the fund. In most cases, the fund manager will split the portfolio across geographic area, by individual sectors, e.g. oil & gas, financials. In order to sprea....
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Auditors are required to certify that the fund accounts produced by their client companies have been prepared in accordance with normal accounting standards and represent a true and fair view of t....
read more >>The term used to describe the manager of an Open Ended Investment Company (OEIC). An ACD has the same role and responsibilities as their unit trust equivalents, known as a fund manager.....
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B
An investor who sells a security in the hope of buying it back at a lower price, as he thinks the market will go down. A bear market is a falling market in which bears would prosper.....
read more >> The beneficial owner of an asset is the person for whose benefit it is being held.....
read more >>A measure of market sensitivity. The sign of the beta (+/-) indicates whether, on average, the investments/portfolio returns move with (+) or against (-) the benchmark. The value indicates the relativ....
read more >>The bid price is the price at which units are sold to investors and are lower than the offer or buying price.....
read more >>The standard differential between the price of buying and selling units. Usually quoted as a percentage term for unit trusts and is generally 6%.....
read more >>A debt security issued by borrowers and sold to investors. Bonds have a stated rate of interest (coupon) at fixed dates when interest and principal must be paid (coupon date and maturity date). Bondh....
read more >>An investor who buys a security in the hope of selling it at a higher price, as he thinks the market will go up. A bull market is a rising market in which bulls would prosper.....
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C
This is the lowest possible price at which an investor can sell units back to the fund manager under FSA regulations. It excludes exit charges. The cancellation price represents the proceeds the fund....
read more >>COLL is a new set of regulations, prescribed by the FSA under the rulebook for New Collective Investment Schemes which all managers were required to adopt by February 2007. Rathbone Unit Trust Managem....
read more >>Funds which pool investors' money and invest on their behalf. This term refers to unit trusts and OEICs.....
read more >>Commission is a percentage of the investment paid to an investment adviser on completion of the investment (initial) for advice given and for ongoing (renewal) service.....
read more >> On completion of the investment in the fund, our dealing office despatches a contract note which contains the details of the transaction.....
read more >>This is a regular payment received by the bondholder over the lifetime of a bond. The coupon rate is expressed as a percentage of the face value of a bond.....
read more >>This is the highest possible price at which an investor can buy units from the manager under FSA regulations. The initial charge is not included. The creation price represents the cost of buying the f....
read more >>A major banking group, the custodian is appointed by the fund's trustee or depositary to safeguard the fund's assets.....
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D
The process of buying and selling investments - shares, units in a unit trust, bonds etc....
read more >>The investing of clients’ money by a member firm on a discretionary basis. The customer leaves specific decisions to the manager’s discretion.....
read more >>Distributions are paid out (if the units in your chosen unit trusts are income-paying) quarterly or half-yearly depending on the trust and represent a dividend based on the amount of income that has b....
read more >>Diversification means owning a variety of investments that typically perform differently from one another. This helps to reduce the risk, or volatility, of the overall collection of investments.....
read more >>That part of a company's profits after tax which is distributed to shareholders - usually expressed in pence per share.....
read more >>Unit trusts and OEICs can be dual-priced. Such funds have an offer price at which you buy, and a lower bid price, at which you sell.....
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E
The effect of charges/deductions figures indicate how charges deducted from within the fund can affect what you might get back. They are designed to help you compare funds to other comparable with....
read more >>Also known as Socially Responsible Investments (SRIs). These funds aim to avoid investing in activities which may be harmful to society, such as tobacco production or child labour. Some funds also aim....
read more >>The ex-dividend (also known as the ‘XD’ date) defines the date from which the dividend is excluded from the share price, thus reflecting the payment in the value of the unit.....
read more >>With effect from 1 November 1994, under FSA regulations, unit trust managers have been given the option to levy a charge on redemption of units in place of, or in combination with their initial charge....
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F
This term used to describe a collective investment scheme, into which investors’ monies is pooled and managed as a single entity with a common investment aim. These protect investors against a rise in....
read more >>In order to sell unit trust holdings, the investor must ‘renounce’ the units held by completing and signing a form of renunciation.Where part of a holding is being sold, the number or the value of the....
read more >>Units are priced on a forward basis when they are bought or sold by the manager at a price which will be fixed at the next valuation of the unit trust.....
read more >>The Financial Services Authority is the regulator of financial services created by the Financial Services and Markets Act 2000. They are an independent body that regulates the financial services indus....
read more >>Arithmetic index of the UK's leading 100 shares, weighted according to the company's market capitalisation. It is a real time index calculated by the London Stock Exchange.....
read more >>A broad index based on 98% of all UK listed companies, in terms of market capitalisation, not number.....
read more >>As above, but relating to the 250 shares below the top 100.....
read more >>FTSE Small Cap constitutes the 500 smallest FTSE companies with an approximate market capitalisation of £40 million to £250 million....
read more >>This term used to describe a collective investment scheme, into which investors' monies is pooled and managed as a single entity with a common investment aim.....
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G
Domestic Sterling denominated government bond issued by the Treasury.....
read more >>The Gross Redemption Yield of a bond is the return a bond earns on the price at which it was purchased if held to maturity. The calculation takes into account any capital gain or loss over the full p....
read more >>A fund whose main objective is capital appreciation. This contrasts with an income fund where the main aim is to provide higher than average income from dividend payments.....
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H
The opposite of forward pricing. This is where managers will buy and sell shares on the basis of prices calculated at the last valuation point - investors therefore know the price they will receive wh....
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I
A fund whose objective is to provide income growth on a regular basis over time.....
read more >>An adviser not employed by a single firm who can select from all companies' products, i.e. pensions, unit trusts, etc, when providing 'best advice' to their client.....
read more >>A grouping of shares or fixed interest securities on the stock market which are often similar in size or represent similar industries. For example, the FTSE 100 index represents the largest 100 UK com....
read more >>An ISA is a scheme of investment with no tax liability on income or capital gains arising from assets held within the scheme. It is not an investment in itself but a wrapper put around one or more in....
read more >>The initial charge on a unit trust is made when the units are sold to the investor. The charge is a percentage of the bid price, and covers the managers' start up costs including commission.....
read more >>These bonds have a low risk of the company that issued them being unable to repay them. The most secure forms are known as "triple A" rated bonds.....
read more >>The IMA is a trade body for the UK investment management industry. Its members provide UK investment management services to institutions (e.g. life assurance, pension Funds) and to private investors ....
read more >>International Securities Identification Number (ISIN). International code for a listed security.....
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J
These are bonds rated 'BB' or lower because of its high default risk. They are also known as a "high-yield bond" “Non-investment grade bonds” or "speculative bonds". These are usually purchased for s....
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K
A document which must be offered to investors in Non-UCITS Retail Schemes (NURS) before or at the point of purchase. It summarises key information about the fund and provides details on risk and an il....
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L
The date on which a unit trust or similar collective investment scheme starts investing its assets.....
read more >>Lipper, a Reuters company, supplys mutual fund information, analytical tools, and commentary. Lipper's benchmarking provides the trusted guidepost to asset managers, fund companies, financial intermed....
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M
Half-yearly fund accounting and investment report.....
read more >>Market capitalisation is used to indicate the value of a company by multiplying the number of shares in issue by the current share price.....
read more >>A price between the offer and bid price. The mid price is equal to the sum of the best bid price and the best offer price divided by two, and rounded up to be consistent with the relevant price format....
read more >>The Committee is made up of economic experts and examines all the data available and relevant to decide whether inflation is likely to rise above the Governments target rate.....
read more >>This is the process of passing money gained illegally through the financial system to convert into legitimate funds. Since 1994, when the government introduced the Money Laundering Regulations, financ....
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N
The total value of a company or fund, based on quoted mid-market prices, together with other assets , less liabilities, divided by the number of shares in issue.....
read more >>Where a client has purchased a unit trust under advice from a professional adviser, the fund provider is obliged to give the client 14 days' cancellation rights. These rights are outlined in the Notic....
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O
OBSR are investment consultants based in the UK and offer ratings on the premise that a fund selection process should, whilst taking past performance into consideration, ascribe greater weight to iden....
read more >>Now known as ICVCs (Investment Company with Variable Capital). These are very similar to unit trusts, but are constituted as companies rather than trusts. They are the established structure in many ot....
read more >>The offer price is the price at which a company is looking to sell units. Usually higher than the bid, or selling, price as it includes an initial charge.....
read more >>These funds have no limit to the number of units (or shares) they can issue. The price of the units (or shares) remains closely aligned to the NAV of the fund. Unit trusts and OEICs are open-ended fun....
read more >>Ordinary shares are also known as equity shares and they are the most common form of share in the UK. An ordinary share gives the right to its owner to share in the profits of the company (dividends) ....
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P
Personal Equity Plans are tax efficient savings and investment plans which were replaced by ISAs in April 1999. PEPs taken out before that date remain valid, although you can no longer place any more ....
read more >>A group of investments held across asset classes (stocks, bonds, real estate, gold) or within the same asset class (exposure to stocks across companies and industries).....
read more >>Buying more units when prices are low and fewer units when prices are high.....
read more >>When a company applies for a listing of its securities which are to be offered to the public in the UK, a prospectus is required in accordance with the UKLA's Listing Rules, detailing information on t....
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Q
Quartile rankings are a measure of how well a fund has performed against all other funds. The rankings range from 1 to 4 for all time periods covered. Mutual funds with the highest percentage returns ....
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R
Rating agencies determine the issuer’s ability to meet their debt obligations to their investors. Agencies include Forsyth OBSR, Standard & Poor’s (S&P) and Fitch IBCA....
read more >>The Redemption Yield shows what the total return on a bond would be if held to its maturity date. It reflects not only the interest payments a bondholder will receive, but also the gain/loss he will m....
read more >>The registrar is responsible for the administration of the share register, distributing shareholder information on behalf of the company and paying dividends to shareholders. RUTMs registrar is Capita....
read more >>Income allocations can be reinvested to purchase further units in the existing investment vehicle....
read more >>The risk index is to set out RUTM's definition of risk for each fund. The ratings are determined by the objectives and investment styles of each of the funds, and market volatilities. Each fund has be....
read more >>Used to describe the income investors get from their portfolio as a percentage of market value of the securities.....
read more >>These acronyms stand for Rathbone Unit Trust Management Limited....
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S
The Stock Exchange Daily Official List number to identify any security.....
read more >>Unit trust purchases have to be paid for. Once units have been bought on your behalf, you have an obligation to pay for the investment prior to the settlement date (a number, usually 4, working days a....
read more >>A measure of the risk adjusted return of an investment/portfolio. It is given by the excess return above the risk free rate divided by the volatility (i.e. standard deviation) of the portfolios return....
read more >>Offered to all investors in UCITS funds before the point of purchasing units/shares. This document formally sets out details of the fund including its investment policy, charges and distribution date....
read more >>In investment terms this is used to describe the difference between the buying and selling price, i.e. the bid-offer spread. This can vary depending on the demand for the investment and the volumes in....
read more >>Stamp Duty Reserve Tax (a charge to the fund, not directly to you), is levied on stock purchases and sales made in the course of managing the fund. It is becoming more frequently levied as a result of....
read more >>An independent company with two main divisions: Micropal (now managed by Morningstar), which provides performance statistics on a wide range of collective investment schemes and Fund Research, which p....
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T
A calculation of costs expressed as a percentage. TERs provide investors with a clearer picture of the total annual costs for running a unit trust or OEIC. It consists principally of the *manager's* a....
read more >>Transferable securities are those classes of investments which are negotiable on the capital market such as shares in companies and other investments equivalent to shares in companies, partnerships or....
read more >>Responsible for overseeing the fund manager's activities in relation to a unit trust. Usually a large bank, the trustee must be independent of the fund manager where the fund is authorised by the Fin....
read more >>The rate at which securities within a fund are exchanged for other securities of the same class.....
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U
A fund or directive that can be marketed in all countries in the European Union. UCITS stands for ‘Undertakings for Collective Investments in Transferable Securities’ and is a European Directive which....
read more >>These are open-ended funds where private investors pool their money to be invested in a portfolio of securities. Unit trusts issue units to investors. Unit trusts issue units in response to demand. B....
read more >>A unit is a proportion of the fund for which a buying and selling price will be quoted.Your investment amount divided by the price will give the number of units that you will be allocated.These can be....
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V
The name given to the time of day that unit trusts or OEICs are valued and then priced, (usually midday).....
read more >>A measure of risk. It shows the variability of returns over a 5 year period (where that length of historic data is available) and is given by the standard deviation of the returns. The higher the vola....
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W
The percentage/share of a portfolio held in a single asset or sector compared with its benchmark/another index.....
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Y
The amount of income generated by a fund's investments in relation to the price. Equity funds will quote net (after tax and charges). Fixed interest securities will quote gross.....
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