Glossary Investment terms The following are explanations of some of the terms you would have come across in this guide. Asset Diversified/Diversification Issue Anything having commercial or exchange value that The practice of investing in a variety of assets. This A set of shares/bonds that were released at a Ais owned by a business, institution or individual. is a risk management technique where, in a well- particular time. Actively managed diversified portfolio, any loss from an individual Issuer Your investment is looked after by a fund manager holding should be offset by gains in other holdings, An entity that sells securities, such as fixed income who will use your invested money (capital) to buy thereby lessening the impact on the overall portfolio. securities and company shares. and sell shares on your behalf, with the aim of Dividends Primary market beating the average stockmarket returns. Dividends represent a share in the profits of Where equities and other securities are sold by the Bond a company and are paid out to a company’s issuer to the purchaser for the first time. A loan in the form of a security, usually issued by shareholders at set times of the year. a government or company, which normally pays a Equities Total return fixed rate of interest over a given time period, at the Shares of ownership in a company. The term for the gain or loss derived from an end of which the initial amount borrowed is repaid. investment over a particular period. Total return Fixed income security includes income (in the form of interest or dividend Capital growth A loan in the form of a security, usually issued by payments) and capital gains. Occurs when the current value of an investment is a government or company, which normally pays a Volatile greater than the initial amount invested. fixed rate of interest over a given time period, at the When the value of a particular share, market or Distributions end of which the initial amount borrowed is repaid. sector swings up and down fairly frequently and/or Refers to the periodic paying-out of interest or Initial Public Offering (IPO) significantly, it is considered volatile. dividends received by funds to their shareholders. The first sale of shares by a private company to Dividends represent a share in the profits of a the public. Z company and are paid out to the owners of company shares at certain times during the year. 10