01753 867000 investments@tavistockinvestments.com GLOSSARY ABI – the Association of British Insurers. ACD (Authorised Corporate Director) – An entity that enforces the rules and regulations, including registration requirements and post-registration requirements, of investment advisory professionals. Adviser – A Tavistock Investments Group Financial Adviser. Annual Report – Includes details of the fund’s investments and how it has performed with more general financial information relating to the fund. It is available from your fund manager at the end of each financial year. Bonds – Also known as fixed interest securities, bonds are investments which pay a fixed rate of interest and have a fixed term. Governments or companies may issue them. Capital – The amount of money you initially put into your savings or investments before it receives any interest or capital growth. In a fund “capital” can also refer to the assets held by the fund excluding any income the fund may receive. Capital Gains Tax – Tax paid to HM Revenue and Customs on any increase in the value of your savings or investments. The tax is payable on the profits you make when you sell your units/shares. There is an annual exemption limit. Closed Ended Fund – A publicly traded investment company listed on a stock exchange. COLL – the FCA rules for collective investment schemes. Correlation – A statistical measure showing the relationship between two different information sets. The range of the data is -1 to 1, the closer the cross-correlation value is to 1, the more correlated the information sets are. Custodian – Usually a major banking group, the custodian is appointed by a fund’s Depositary to safeguard the fund’s assets. Derivatives – Financial instruments enabling investors to gain exposure to equities, commodities or other investments without having to trade the physical assets or shares. Derivatives include CFDs, Futures, Options and Synthetic Assets. Diversification – A term used to describe the spreading of risk by investing in a number of different companies and assets. Doing so will mean that you won’t have all of your eggs in one basket. ETF (Exchange Traded Fund) – security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a share on an exchange. Full Prospectus – The official document issued by a fund prior to its launch to describe the shares being offered to prospective investors. A prospectus must generally include the characteristics of the proposed fund, such as investment objective and policies, services and fees. FTSE 100 – Equity index on the London Stock Exchange which comprises the leading 100 UK Companies. GPP – Group Pension Plan. Hedging – Making an investment to reduce the risk of adverse price movements in an asset. Half-Yearly Report – Also known as the “interim report”. It will include details of a fund’s investments and how it has performed with more general financial information relating to the fund. IA – The Investment Association. Index – 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 companies by market capitalisation. KIID – A document containing key investor information and introduced under UCITS legislation in 2011. Liquid Asset – An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when sold on the open market. Multi-Manager funds – Multi-Manager funds are designed to increase diversification by outsourcing a pool of money for investment to a number of appointed managers. NAV (Net Asset Value) – A fund’s price per share. It is the value of the fund’s assets less the liabilities, divided by the total number of shares in issue. Portfolio – Refers to investment holdings. It can either refer to the holdings within a particular fund or the range of investments held by an individual investor. SIPP – Self-invested Personal Pension. UCITS IV – A fund 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 has been adopted in the UK. Volatility – The relative rate at which the price of a security moves up and down. This is usually measured by Standard Deviation. The greater the volatility, the higher the risk. Yield – The amount of income generated by a fund’s investments in relation to the price. Tavistock Investments Plc, Registered in England and Wales. Registered Office: 1 Bracknell Beeches, Old Bracknell Lane, Bracknell RG12 7BW, Company Number 05066489. 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