` GLOSSARY A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A-Shares Shares in mainland Chinese companies listed on the stock exchanges of Shanghai and Shenzhen. A-Shares are generally only available for purchase by mainland Chinese citizens, with foreign investment only allowed through the tightly regulated Qualified Foreign Institutional Investor Scheme (QFll). See also QFll. Absolute return An approach to investing designed to deliver positive investment performance regardless of the investment environment. Accum or accumulating Instead of income derived from the fund’s shares being paid to investors as dividends, this income is re-invested within the fund to buy further shares. Acquisition The purchase of one company by another. This is often undertaken as a means of increasing sales, enabling economies of scale, or to eliminate a competitor. Active managers Investment managers who aim to outperform a particular benchmark or index by monitoring the market and making decisions about which investments to buy or sell. Active members Members of a pension scheme who are working employees of the company and are continuing to build up pension benefit in the scheme. Actuarial valuation An assessment of a company's defined benefit pension scheme to see whether the current investment strategy can meet future pension payments to members. This is an important process because a defined benefit scheme relies on contributions from the company and investment returns to pay the members of the scheme. It is usually carried out every three years by an actuary. Actuary A professional expert on statistical analysis who calculates risks for insurance companies or pension funds. Actuaries generally focus on the impact of probabilities like life expectancy and the risk of death and probabilities on an institutional client's assets and liabilities; Agency Buying or selling by stockbrokers on the investor's behalf and at the investor’s risk. Agreed bid A bid to buy a target company which is made with the full knowledge and consent of the company’s board. All-Gilt index An index composed entirely of UK government bonds. Alpha A measure of risk-adjusted returns over and above those provided by the market. Alternative investments Asset classes other than bonds, equities and cash. See also commodities, hedge funds, infrastructure, private equity. Annualised return The average return over a one year period calculated from returns over a lesser or greater period. Used as a means of direct comparison. Asset Something owned which has value in an exchange, such as an investment, a debt, a right, property or money in the bank. Asset allocation The act of deciding which categories of assets and in what proportions the "investment" should be assigned to at any given time to yield the most attractive returns. As an investment strategy it aims to balance risk and reward according to goals, risk tolerance and investment horizon. Asset categories Types of assets, such as equities, gilts, corporate bonds or cash. Asset distribution The choice of categories of assets and in what proportions an investment should be assigned to them at any given time to yield the most attractive returns. See asset allocation. Asset value The net market value of a company’s assets per share. Average Weighted Coupon Figure derived by weighting the coupon of each bond by its relative size in the portfolio A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Share this page: The value of investments and income from them may go down as well as up, and you may not get back the original amount invested. Quick Links • About Us • Stewardship Services • Contact Us • Policies & Disclosures Press Centre Glossary Connect @FedHermesIntl @CreditSpectrum @EOSFedHermes Federated Hermes - International Hermes Fund Managers Limited ("Hermes"): Registered in England & Wales No 01661776. Registered office – Sixth Floor, 150 Cheapside, London EC2V 6ET. Hermes is majority owned by Federated Hermes, Inc © Copyright Hermes Fund Managers Limited 2021 | ISO 14001 Accredited Important information Privacy Cookies Modern Slavery Statement