We've prepared this helpful guide to common terms used on the Charles Stanley Direct website. If you discover a term that isn't listed and would like it to be added, we'd like to hear from you.
Credit agencies Standard & Poors and Moody's award this rating to securities issued by companies, such as bonds, where there is little or no risk of default.
Each investment held with Charles Stanley Direct is listed under account details and linked to the relevant product, for example 'MY ISA'.
Accrued interest is the amount of interest that is owed, but has not yet been paid.
Units that automatically reinvest any income back into the unit or investment trust. Rather than buying more units, the fund's unit price is increased to reflect the income that would have been paid out. Even though the income is not actually received, it is still taxable.
Actively Managed investments utilise the skills of a Portfolio Manager whose task it is to select stocks that provide a return in excess of a benchmark, such as the FTSE100 Index.
Additional Voluntary Contributions
Extra contributions paid by an occupational scheme member to provide additional pension benefits at retirement. Arranged via the pension scheme administrator and subject to the members annual allowance.
A legal binding agreement that protects a company, for a period of time, from its creditors. The aim of such an order is to provide the company with enough time to restructure its business or to realise assets to meet the demands of the creditors.
This is a stock market technical indicator used by speculators to measure the number of individual stocks participating in a market rise or fall. As price changes of large stocks can have a disproportionate effect on indices such as the FTSE100, it can be useful to know how broadly this movement extends into the larger universe of smaller stocks. Since market indices represent a group of stocks, they do not present the whole picture of the trading day and the performance of the market during that day.
After Hours Dealing
Deals that are completed after the market closes. The international nature of stock markets means that many equities are listed on more than one and as such can be traded out of normal business hours. For deals that are completed during this time, they are treated as having been completed at the start of the next trading day.
After Hours Trading
Trading that takes place outside the normal hours of a stock exchange and as such is not accounted for in the closing prices. Details are provided to the Exchange at the start of the next business day.
AIM (Alternative Investment Market)
The Alternative Investment Market (AIM) allows small and growing companies to list their shares in order to raise capital for expansion. Since its launch in 1995, over 3,000 companies over chosen to list their shares on AIM. Regulation is less onerous than for those companies requiring full listing.
Share offerings, particularly for popular shares, are often over subscribed. When this occurs all applicants will receive fewer shares than they originally applied for - this is called an allotment.
Analysts study companies and use the information obtained to make buy and sell recommendations using a variety of investigative techniques. Often termed as a 'financial analyst' or 'securities analyst'.
Annual General Meeting (AGM)
Company accounts are presented to shareholders once every calendar year (regulations require there to be no more than 15 months between each AGM). The meeting will include a review of the previous year along with prospects for the next 12 months. Shareholders are able to vote to apply penalties and on the election and re-election of directors, appointment and remuneration of auditors and adoption of the accounts.
Annual Management Charge
The Annual Management Charge (AMC) is expressed as a percentage and is deducted from the net assets of the fund during the course of its financial year. Investors will not see a physical charge, the cost being accounted for by an adjustment in the unit price.
This is a regular income that is paid for life from a lump sum normally the proceeds of a pension scheme (company or personal). It is also possible to 'buy' an annuity with new money to provide a regular income. The income paid at outset is usually determined by the age of the annuitant, their life expectancy, state of health and the prevailing interest rates at the time.
After age 55 pension plan benefits can be taken (with the exception of occupational schemes which have a fixed date). However, it is not necessary to buy an annuity immediately, this can be deferred to a time of the plan holder's choosing.
Appropriate Personal Pension
A personal pension scheme that was used by an individual before 6 April 2012 to contract out of the state second pension.
A part of a pension scheme, which might be the entire fund, that relates to retirement benefits that must be separately identified. For example, if you transferred two sets of retirement benefits into a SIPP which were each paying you a drawdown pension, the Scheme Administrator would create a separate arrangement for each transfer, each with its own review date.
The price at which a security or fund can be bought.
Any item of economic value owned by an individual or company, especially that which could be converted to cash.
A member of the Stock Exchange who does not have a seat on the Exchange.
An instruction to a broker or dealer to obtain the best price or rate that they are able to.
Authorised Corporate Director (ACD)
A corporate body and an authorised person given powers and duties under FCA regulations to operate an OEIC.
Authorised Share Capital
The number of shares that a company is allowed to issue - specified in the Memorandum of Association, Not all the authorised share capital needs to be issued but if it needs to be adjusted, a full shareholder meeting is required.
Automated Order Entry System
Electronic trading software which facilitates small order execution by routing the orders directly to the appropriate specialist on the Exchange floor, rather than via a floor broker.
The key point about pound cost averaging is that you invest small amounts on a regular basis. When prices are high your contribution may buy fewer shares but when prices are low your contribution buys more shares.
The administrative function of a financial services company.
When a Market Maker is prepared to buy a share at a higher price than another is prepared to sell at (the offer is higher than the bid price).
The amount of available funds (money) after debts have been accounted for.
The portion of a debt that has not yet been repaid in full.
These charts are used to help analyse share price movements. The x-axis represents time and the y-axis, price with the individual time periods displayed by a bar.
The colloquial name for a transaction on the Stock Exchange.
This is set by the Monetary Policy Committee of the Bank Of England. Banks and Building Societies use this to set the interest rates they offer to borrowers and savers.
Basic State Pension
The basic state pension is paid to people over state pension age who have made enough national insurance contributions in qualifying years. The number of qualifying years you need to get a full basic state pension depends on your age and sex. If you have reached state pension age without building up the full entitlement you will still be able to claim a portion of the state pension. How much will depend on how many qualifying years you have built up. You can get a state pension forecast at https://www.gov.uk/.
Basis Point (BP)
One-hundredth of one per cent. Used to describe small increments of yield and price. For example, a quarter of 1% would be expressed as 25 basis points or bp.
Formerly known as the GAD rate. It is a factor based on a pensioners age and the current gilt yields which is used to determine the maximum capped drawdown pension payable. Once a pension is in payment the basis rate is reviewed at least every three years.
Means a person eligible under the Scheme's rules to receive a lump sum on your death. This includes any person nominated by you in this form plus relatives, dependants and any beneficiary under your will.
An individual, institution, trustee, or estate which receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust, or other contract. Beneficiaries can, in most cases, be changed at anytime.
Best Execution Requirement
The obligation of market makers, brokers/dealers and others to execute customer orders at the best price available.
With reference to shares, this is the price that a market maker is prepared to buy at and the price at which an investor can sell. Unit Trusts often have a Bid/Offer spread which refers to the buying and selling price of a fund.
Monday 19th October 1987 is the day when stock markets around the world 'crashed'. The decline began in Japan and spread to other stock markets with many recording their largest one day falls.
This is the designation given to companies that are able to operate profitably during periods of good and bad economic activity. Often they will be multi-national companies that have been established for many years. Companies that are listed on the FTSE 100 are examples of 'Blue Chips'.
Both companies and governments issue bonds to raise capital. Bonds pay a fixed rate of interest for a set period of time until maturity at which point the original capital, or principal, is repaid.
Credit agencies such as Moody's and Standard and Poors, analyse the potential of the principal being repaid and whether the bond is likely to default. The rating ranges from AAA (the best) to D which is where a bond is in default. Those rated BBB or above are considered to be investment grade with those rated below termed as 'junk' bonds due to the higher risk of default.
Also termed as a Capitalisation or Scrip issue. This describes an issue of additional shares by a company to its shareholders at no cost.
Book Cost Currency
The currency in which the price of the share is listed (e.g. GBX = Pennies).
Book Price or Book Cost
The total purchase price, this includes all the costs of purchasing a share (stamp duty, commission etc).
Bull and Bear Markets
A market is classed as being in 'Bull' territory if it has been on an upward trend for a period of time. A market is said to be in 'Bear' territory if the price of shares has fallen by 20% or more over a period of 2 months.
A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury bonds. The German government uses bunds to finance its spending. Long-term bonds are the most widely issued, with billions of euros' worth outstanding, and these come in 10- and 30-year durations.
A feature where a bond issuer has the option to redeem it early.
Can not be cancelled
For logistical reasons we cannot accept cancellations for pending fund orders.
This is the the lowest possible bid price of units in a unit trust under FSA regulations, which is usually lower than the quoted bid price. The cancellation price may be applied in the event of heavy selling.
These are a style of bar charts used to describe price movements over a period of time. Developed in Japan, the charts display the open, close, high and low points. The section between the open and close is normally white for an 'up day' (open is higher than close) and black for a 'down day' (close is higher than open).
The maximum price that a share can be dealt at.
An increase in the value of an investment when compared to the amount originally invested.
Capital Gains Tax
Tax that is payable on gains realised on the sale or disposal of an asset (excluding ISAs). All investors have an annual Capital Gains Tax Allowance which negates any tax due if the gain falls within that annual allowance.
An issue of shares made by a company to shareholders in proportion to the number of shares that are already held. Shareholders do not have to pay for the new issue, the cost of which is met from company reserves.
Capitalisation or Market Capitalisation
The value of a company calculated by multiplying the number shares in issue with the current share price.
This measures the extent to which a company is using debt and equity issue to finance growth. A low level of debt and a high equity value indicates a company is operating efficiently.
Investors buy shares to benefit not only from capital growth but also to receive dividends. Dependent upon how well a company has performed during the year a dividend can be payable after the accounts have been published. Additionally, interim dividends can also be paid during the course of the year.
The monetary change in the share price during the trading day.
Change in Value
The difference between the market value and the book cost/tax cost.
The change in the value of the share over the course of period of time expressed as a percentage.
Included within this definition are 'hard' commodities, such as copper, iron ore and aluminium, and 'soft' commodities which include cocoa, coffee and tea. Commodities are tradable but can be extremely volatile in price. Extreme movements can be caused by natural disasters such as drought in respect of soft commodities or economic slowdown in respect of hard commodities where demand falls rapidly.
The products that will accept the fund as an investment - not all are compatible
Most financial firms are regulated. It is the role of the compliance department to support business areas in their duty to comply with relevant laws, regulations and internal procedures.
When studying the movement of a share price, there will be generally be an upper and lower value with the share price trading within the two barriers. The period of indecision when the share price doesn't break out of its trading range is known as consolidation. This could last for minutes, day, weeks or years with lengthy periods of consolidation know as a 'base'.
A unique number given to each trade.
These are types of bonds that can be converted to the issuing company's shares at an agreed price.
Cooling Off Period
A defined period of time within which the purchaser has the right to cancel a plan. The time available depends upon the type of product.
Issued by companies to raise capital for growth or to improve balance sheets. They usually offer a fixed coupon with the original investment (principal) being returned after a set period of time.
A coupon payment on a bond is a periodic interest payment that the bondholder receives between issue and maturity of the bond.
This allows the holder to buy or sell a specific number of shares in a company at a set period in time for a pre-agreed price. There is, however, no obligation to do so. Covered Warrants are normally issued by banks and other financial institutions.
A payment made to your account. Where your account is ‘in credit’ money is available for purchases.
Credit Default Swaps (CDS)
Effectively a contract offering protection against the default of a bond issuer. The purchaser of the swap makes payments to the seller until the maturity date. In return the seller agrees to pay off a third party debt if this party defaults.
The credit worthiness of bond/sovereign issuer or company, as determined by the credit rating agencies - AAA is the best, D the worst.
An electronic clearing system used to settle trades in the UK financial markets.
A provision in a bond or loan agreement which puts the borrower in default if he defaults on another obligation.
These are supplied by FE (formerly Financial Express), an independent rating agency, and are one of the various ways used to rate past performance of a fund. Once a fund has been assessed it will be given one of five crown ratings (if eligible) as follows:- FE Crown Rating 5 - These are the top 10% of funds in each grouping based on their total scores and by definition will have demonstrated a good, if not excellent record across three criteria. FE Crown Rating 4 - This rating goes to the nest 15% of funds in their grouping. FE Crown Rating 3 - This rating goes to the next 25% of funds in their grouping. FE Crown Rating 2 - This rating goes to the next 25% of funds in their grouping. FE Crown Rating 1 - The bottom 25% of funds in their group appear here. FE Crown Rating N/A - Funds with this rating do not meet the criteria needed to enable a rating to be calculated e.g. do not possess a three-year track record.
Where a buyer of a security has the right to a dividend that has been declared but not yet paid.
Where the registered holder of a share qualifies for a rights issue declared by a company.
The denominated currency of the share.
A country's or government's exchange-rate policy of pegging the central bank's rate of exchange to another country's currency. Currency has sometimes also been pegged to the price of gold. Currency pegs allow importers and exporters to know exactly what kind of exchange rate they can expect for their transactions, simplifying trade.
Company declared liabilities which are due to be settled within the current financial year.
This is used to calculate the ability of a company to meet its short term debt obligations. It is calculated by dividing its current assets by its current liabilities. The higher the current ratio, the more likely a company will be able to meet its obligations.
Date the security/fund was purchased.
The highest price quoted during the course of the trading session.
The lowest price quoted during the trading session.
This defines a stock trader who may hold a number of positions during the day for short periods of time. All trades will be settled by the end of the trading day.
The amount payable to the beneficiary or estate on the death of the insured. Provision of a death benefit also applies to certain types of pension arrangements. Also known as 'survivor benefit'.
Debentures are debt instruments issued by companies and governments. They are not secured against any tangible assets, instead the investor will purchase the debenture based on the reputation of the issuer (governments are unlikely to default). They normally pay a fixed rate of interest for a set period of time. Where a company goes into liquidation, debenture holders will be paid before holders of loan stock, preference or ordinary shares.
The accounting entry which shows the cost of purchasing a share or unit usually on the Statement of Account.
Debt Equity Ratio
A measure of a company's financial leverage calculated by dividing its total liabilities by the number of shares in issue. If the ratio is high, it indicates that a company has been aggressive in financing growth with debt which could lead to volatile earnings in the future.
The failure promptly to pay interest or principal when due. Borrowers may default when they are unable or unwilling to make the required payment.
Holders of this type of share have the same rights as ordinary share holders. The exception is that they are not entitled to any dividend payments until certain conditions are met.
This occurs when there has been a general decline in prices over a period of time usually due to a decrease in the amount of credit available along with a contracting money supply. Deflation can also occur if there is a decrease in government, personal or investment spending.
The removal of a listed security from the exchange on which it trades. Stock is removed from an exchange because the company for which the stock is issued, whether voluntarily or involuntarily, is not in compliance with the listing requirements of the exchange.
Often referred to as DEMAT, this is the process of converting paper certificates into electronic form. New share issues are very rarely in physical form with records being held electronically.
A demerger is a form of corporate restructuring in which the entity's business operations are segregated into one or more components. It is the converse of a merger or acquisition.
Means your spouse or civil partner, any child of yours under age 23, anyone who is dependent on you due to mental or physical impairment, and anyone (except a child over 23) who is financially dependent on you or with whom you are financially mutually dependent.
A deposit account is a current account, savings account, or other type of bank account, at a banking institution which allows money to be deposited and withdrawn by the account holder. These transactions are recorded on the bank's books, and the resulting balance is recorded as a liability for the bank, and represent the amount owed by the bank to the customer. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited.
A dilution levy is an adjustment made to the price of units in a fund, to reflect a fund’s transaction costs as a result of large inflows or outflows of capital. This is intended to protect existing or remaining investors against the adverse performance impact of new or leaving investors.
Company Directors will often buy and sell shares in the company on whose board they sit. This practice can be an indicator that they have confidence in the prospects of the company. Share activity is barred during the 6 week period leading up to the publication of the annual accounts.
A bond pricing quote referring to the price of a coupon bond that includes the present value of all future cash flows, including interest accruing on the next coupon payment. The dirty price is how the bond is quoted in most European markets, and is the price an investor will pay to acquire the bond.
Where a company is required to provide all details of the cost of a sale to a purchaser prior to completion.
Disqualifying pension credit
Means a pension credit under a pension sharing order on divorce that came from pension benefits held by an ex-spouse that were already in payment.
The practice of reducing the risk of investing by spreading investments across a range of sectors, markets and financial instruments.
A cash sum, based on the number of shares held, that is paid to shareholders. Dividends are variable and dependent upon the profitability of the company.
The ratio of company earnings (net income) over the dividend paid to shareholders, calculated as earnings per share divided by the dividends per share. For example, if a company has earnings per share of £10 and it pays a dividend of £2 the dividend cover is 5.0x.
Dividend Pay-Out Ratio
The percentage of earnings paid to shareholders in dividends.
A financial ratio which shows how much a company pays out in dividends each year relative to its share price. Dividend Yield = annual dividend per share / stock's price per share.
This occurs when the earnings forecast for a company or the prospects for the share price are reduced. The credit rating for a bond or other financial instrument can also be downgraded if there is an increased risk of a default.
Describes the price movement of a share, equity or bond when the overall direction is downward. A formal downtrend occurs when each successive peak is lower than the previous one.
A drawdown pension allows you to take income from your pension pot while the pot remains invested. You can choose how much pension you want to be paid each year.
A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices.
The amount of profit generated (after tax) in a specific period. Earnings are typically the most studied part of company accounts as they can give an indication as to its future prospects. Earnings are the main driver of the share price.
An Extraordinary General Meeting called by the company to table motions that are considered too time critical to wait until the Annual General Meeting (AGM).
This is an investment sector which includes countries that are making rapid economic progress and which are likely to influence the world economy. Typically the working population in these countries earns significantly less than their counterparts in the developed economies.
Enhanced protection means that whatever the value of the pension funds of an individual, who has a valid Certificate of Enhanced Protection from the HMRC, at the time they are crystallised they are not subject to the Lifetime Allowance, provided that since 5 April 2006, no pension inputs have been made to any registered pension schemes by or for the individual.
Dividends paid out by a fund manager reflect the distribution of income for the whole period since any previous dividends were paid, regardless of when the units or shares were purchased. To ensure the fair treatment of all unit/shareholders, the purchase price of the fund includes a sum of money which represents the income accumulated on those units/shares up to the point of purchase. When an investor receives their first dividend it will include an 'equalisation' payment, which is the value of the accumulated income up to the point of purchase. This in effect returns part of the purchase price and as such, is not taxable as income.
A stock or any other security representing an ownership interest. In finance, equity denotes ownership of an asset after all debts associated with the asset have been settled. Shares are termed as equities as they represent ownership in a company.
The annual dividend income estimated to be paid based on the value of the holding of an investor. The estimate is calculated using the current dividend yield.
Estimated Yield Percentage
The annual dividend income per share received from a company, divided by its current share price. Dividend yields are calculated on the net dividend paid over the course of a year divided by the stock's price. For example, if a company declares a net dividend of 2.1p per share and has a share price of 150p, the dividend yield is 2.1/150 = 1.4%.
Ethical Funds have strict criteria on which companies they able to invest in. Generally these are companies that make a positive contribution to the environment and to the quality of life. For example, oil exploration companies often will make substantial investments to the local infrastructure of the country in which exploration is being undertaken and are therefore considered to be an acceptable investment.
A Eurobond is an international bond issued in a currency not native to the country or market in which it is issued. A bond that is denominated in US dollars and issued in Japan by an Australian company would be an example of a Eurobond.
One of two principal clearing houses for securities traded in the Euromarket. Euroclear specialises in verifying information supplied by two brokers in a securities transaction and the settlement of securities. Euroclear is market owned and governed, and has previously acquired London Crest, Necigef Netherlands, Sicovam Paris and CIK Brussels.
Where a share is ex-dividend it entitles the seller of the share to a non-declared dividend rather than the buyer. Once the distribution has taken place future dividends will then be paid to the buyer.
Where shares that are still tradable no longer have rights attached to them. This may be due to the fact that the rights have already been exercised or that they are no longer valid.
Stock sold where the buyer is no longer entitled to the warrant attached to the stock.
Exchange Market Size (EMS)
This is the maximum number of shares that the market makers are obliged to quote for a particular security. EMS is based on a percentage of the share's average daily turnover in the previous year.
Exchange Traded Fund (ETF)
An ETF is a collective investment that tracks an index but which can be actively traded on a stock exchange at net asset value.
Execution Only Service
Investment service that acts only on the instructions of the client and does not offer any financial advice.
The nominal value of a security stated by the issuer which, with regards to shares, is the original cost shown on the certificate. The nominal value is particularly important with regards to the Authorised Share Capital. This is the number of shares that the company is permitted to issue multiplied by the face value.
The Fact Sheet is supplied on a monthly basis by the management group and provides limited information on the fund. Past performance data and a review of how the fund has performed are commonly featured.
FIFO (First In, First Out)
An asset management method in which the assets produced or acquired first are sold, used or disposed of first.
Fill or Kill
A type of securities trading that instructs a brokerage to fill an order immediately, and in full, or to cancel it (kill it). It is a method often used by day traders to ensure the desired price is secured.
Final Salary Scheme
A pension scheme in which an employee's pension is based on the number of years of service and final salary with each employer. In this type of scheme employees are typically provided with 1/60 of final salary for each year of service up to a maximum of 40/60 that is, two thirds of final salary. At retirement a tax-free lump sum may be taken at the expense of a reduced pension.
Financial Conduct Authority (FCA)
The body which regulates the financial services industry in the UK.
Fiscal Year (Financial Year)
A period that a company or government uses for accounting purposes and preparing financial statements. In the UK for example, the fiscal year used by the government is April 6th to April 5th.
Property which a company owns and uses in connection with the generation of income, such as machinery. Fixed Assets are sometimes referred to as 'plant'.
Fixed Protection 2012
Fixed Protection 2012 means that the value of pension funds of an individual, who has a valid Certificate of Fixed Protection from HMRC, at the time they are crystallised, will be measured against a lifetime allowance of at least £1.8 million, provided that after 5 April 2014, no pension inputs have been made to any registered pension schemes by or for the individual.
Fixed Protection 2014
Fixed Protection 2014 means that the value of pension funds of an individual, who has a valid Certificate of Fixed Protection from HMRC, at the time they are crystallised, will be measured against a lifetime allowance of at least £1.5 million, provided that after 5 April 2014, no pension inputs have been made to any registered pension schemes by or for the individual.
The process of changing a private company into a public company by issuing shares.
Free Cash Flow
The cash that is left over after the running costs of a business have been met. Free Cash Flow is important as without it a company will be unable to develop new products, make acquisitions, pay dividends and reduce debt.
The free float of a company is the portion of its shares that can be publicly traded.
Free Standing Additional Voluntary Contribution (FSAVC)
A standalone pension plan operated outside of the main pension scheme and available to all active occupational scheme members. Similar to AVCs, their appeal is that more investment choice is generally available. Recent legislation means that there will be no new FSAVCs.
The FTSE UK Index Series is designed to represent the performance of UK companies, providing investors with a comprehensive and complementary set of indices that measure the performance of all capital and industry segments of the UK Equity market. There are a number of indices representing different categories of shares with perhaps the most well-known being the FTSE100 which represents the top 100 companies in the UK by capitalisation.
A company can apply for a full listing on the London Stock Exchange once it has met certain criteria. A company can also apply to be de-listed if it finds the requirements of a continual listing too onerous.
Fund Management Group
Companies that manage a range of funds on behalf of investors. The funds offered by the group tend to be spread across a number of sectors. The sectors are defined by the Investment Management Association (IMA) and are designed to assist investors in understanding the focus of the fund, for example whether it aims to produce income or growth. Many of the sectors also have a geographical focus.
Fund Manager’s Report – Final
A report published by the Fund Management Group detailing the progress of the fund during the course of the previous 12 months. The information provided includes a financial statement for the group as a whole.
Fund Manager’s Report – Interim
Published usually half way through the course of the financial year of the fund, the report provides an overview of the fund's performance and the prospects for the remainder of the year. Included are portfolio changes (i.e. which stocks have been bought and sold), and changes in the geographical breakdown during the course of the previous 12 months.
A method of evaluating the value of a share by examining the underlying strength of the company, market prospects for the company and taking into account wider economic factors. This method is the opposite of technical analysis which focuses on the share price and market movements.
Key Features Document (KFD)
Provided by the Fund Management Group, the KFD provides information that investors need to be aware of. Included are the type of assets in which the fund invests as well as the aims and risk factors associated with investing in the fund. Not all Fund Management Groups provide this document.
Key Information Document (KID)
This document, issued by the product provider, provides key information about an investment product. The information is required by law to help potential investors understand the nature, risks, costs, potential gains and losses of the product and enable comparison with other products.
Key Investor Information Document (KIID)
This document, issued by the product provider, provides key information about an investment product. The information is required by law to help potential investors understand the nature, risks, costs, potential gains and losses of the product and enable comparison with other products.
Manager’s Report – Final
A report published by the Fund Management Group detailing the progress of the fund during the course of the previous 12 months. The information provided includes a financial statement for the group as a whole.
Manager’s Report – Interim
Published periodically through the course of the financial year of the fund, the report provides an overview of the fund's performance and the prospects for the remainder of the year. Included are portfolio changes (i.e. which stocks have been bought and sold), and changes in the geographical breakdown during the course of the previous 12 months.
This is a formal document which contains details of the funds' objectives, investment strategies, risks, performance, distribution policy, fees and expenses and, fund management style. A fund’s prospectus must be lodged with the Financial Conduct Authority (FCA) for authorisation.
Supplementary Information Document (SID)
The Key Investor Information Document (KIID) provides industry standard data for a fund. However, due to its standardised nature, not all the information for a fund can be included. Additional information is therefore included within the Supplementary Information Document (SID).
A company's level of long-term debt compared to its share capital expressed as a percentage figure. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. A company with a high gearing would be considered speculative.
A gilt is a UK Government liability in sterling, issued by HM Treasury and listed on the London Stock Exchange. The term “gilt” or “gilt-edged security” is a reference to the primary characteristic of gilts as an investment: their security. This is a reflection of the fact that the British Government has never failed to make interest or principal payments on gilts as they fall due.
Gross Domestic Product
The monetary value of all the finished goods and services produced within a country's borders in a specific time period. It includes all of private and public consumption, government expenditure and exports less imports.
The annual rate of interest to be paid on an investment, security or deposit account before taxes or other charges are deducted. Gross interest is the interest bondholders receive from their investment, which will be subject to further taxes. This is opposed to net interest.
Group Pension Scheme
A pension scheme operated by Employers for the benefit of their Employees. A scheme will either be 'Defined Contribution' where the contributions are added to an account to be invested to provide a pension at retirement or, 'Defined Benefit' where, although the employee still pays a percentage of their salary into the scheme, the final pension is based on a percentage of salary as defined in the scheme rules.
Guaranteed Annuity Option
A guarantee by an insurer to convert a policyholder's accumulated pension fund to a life annuity at a fixed rate when the benefits are taken. If the annuity rates provided under the guarantee are more beneficial to the policyholder than the prevailing rates in the market the insurer has to make up the difference.
An aggressively managed portfolio of investments that uses advanced investment strategies such as leveraged, long, short and derivative positions in both domestic and international markets. Their aim is to generate high returns which are considered more risky than most mainstream investments. They often have a high entry level and can be illiquid and therefore difficult to exit.
The acquisition of one company (the target company) by another (the acquirer) that is accomplished by bypassing board approval and approaching the shareholders directly. To ensure approval of the takeover the offer to the shareholders is often in excess of the current market value of the shares.
When a fund order is believed to be valid and has been successfully entered into the system for processing it is described as incepted. The fund order will be executed at the next pricing point - often the next business day. However, it is not guaranteed that the execution of your order will succeed. If it does not, you will be contacted by the help desk and advised of next steps.
These are ad-hoc charges usually related to performance fees (if applicable).
This type of unit gives the investor the choice of either receiving a dividend from the fund when available or, reinvesting the dividend to purchase further units.
A portfolio constructed with the aim of matching both the constituents and the performance of its chosen index. Often referred to as 'tracker' funds.
Index Linked Gilts
Government issue bonds where both the coupon and the principal are linked to the Retail Price Index.
Individual Protection 2014
Individual Protection 2014 means that the value of pension funds of an individual, who has a valid Certificate of Fixed Protection from HMRC, at the time they are crystallised, will be measured against a lifetime allowance equal to the total value of their pension funds at 5 April 2014 (which must have been more than £1.25 million), will have a protected lifetime allowance equal to that value up to a maximum of £1.5 million. Individual Protection will not be lost if pension inputs are made on or after 6 April 2014.
Individual Savings Accounts (ISAs)
ISAs were originally introduced in 1999 and allow investors to save in a tax efficient way. There is no further tax to pay on growth or income generated within an ISA wrapper. Because of this contributions are limited during each tax year . The annual allowance can be split between a Cash ISA and Stocks and Shares ISA. Applicants must be over 18. Junior ISAs are available for children - see later entry.
Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Most central banks will attempt to maintain inflation between 2-3% to maintain a buoyant economy.
This is a levy raised by fund managers for new investments into a fund. The Initial Charge quoted on our page is the effective charge through CS Direct and supercedes any quoted on the fund factsheet.
Initial Public Offer (IPO)
The first sale of shares by a private company to the public. IPO's are mainly offered by smaller, younger companies seeking to raise capital to expand.
This is the trading of a company's stock or other securities by individuals who have access to non-public information about that company. The information can give the trader an advantage over those who do not have access to it. For example selling shares prior to the announcement of poor annual results.
An asset of a company that does not have easily identifiable value such as a patent or brand recognition.
Company results that are published during the accounting year - usually quarterly or half-yearly.
International Securities & Markets Association
A self-regulatory organisation and trade association originally located in Zürich, Switzerland, that encourages systematic and compliant trading in the international securities market.
International Securities Identification Number (ISIN)
A unique international code which identifies a securities issue. Each country has a national numbering agency which assigns ISIN numbers for securities in that country. Since the ISIN is recognised internationally, it is an efficient tool for securities trading as it helps to differentiate securities from the same issuer.
Investment Association (IA) Sectors
There are over 2,500 funds available to invest into in the UK. To assist investors, the IA has developed over 30 sectors - each with a specific definition. Most are based on assets, such as equities and fixed income but they may also have a geographical focus. A few will focus on investment strategy, such as Absolute Return. The sectors are divided into four broad groups, each with a different investment focus: Growth, Income, Capital Protection and Specialist Funds. Some funds choose to remain unclassified within the sectors.
A term used to describe bonds rated as BBB or above by credit agencies.
A company quoted on the London Stock Exchange that invests in the shares of other companies. They enable private investors with limited funds access to a portfolio of shares without incurring high dealing costs. Unlike Unit Trusts, Investment Trusts are close ended and have a fixed number of shares in circulation. The price of the shares will vary according to supply and demand in addition to the success/failure of the Trust manager.
A family of Exchange Traded Funds (ETFs) that track various stock or bond markets. Being tradable at net asset value at any point during the trading day makes them attractive to investors.
A general increase in stock prices during the month of January. The rally can be attributed to an increase in buying activity which follows the drop in price that typically happens in December when investors, seeking to create tax losses to offset capital gains, prompt a sell-off.
Introduced in 2011, Junior ISAs are available to all children under the age of 18 who do not have a Child Trust Fund. Contributions are limited during each tax year.
A bond rated 'BBB-' or lower by ratings agencies due to the higher potential of default. Because of their status, junk bonds tend to offer substantially higher interest rates than bonds with a higher credit rating.
An obligation that legally binds an individual or company to settle a debt. For example, in the case of a company, a liability is recorded on the balance sheet and can include accounts payable, taxes, wages and accrued expenses. Current liabilities are debts payable within one year, while long-term liabilities are debts payable over a longer period.
LIBOR (London Inter Bank Offered Rate)
LIBOR is the world's most widely used benchmark for short-term interest rates and dictates the rate at which banks can raise funds from other banks on the interbank market. LIBOR is set daily by the British Bankers Association.
Lifetime allowance is the upper limit on tax favoured pension savings an individual can crystallise in aggregate in all of their registered pension schemes.
An annuity contract purchased from an insurance company and which meets the conditions imposed through paragraph 3, Schedule 28 to the Finance Act 2004 as amended.
An order to buy or sell a set number of shares at a specified price or better. They are especially useful if trading when the volume of deals is low or the stock is particularly volatile.
Limit Order Criteria
The price at which the limit order is activated or triggered.
Generally occurs during times of economic stability when there are a large number of both those willing to buy and those willing to sell.
When a business or firm is terminated or bankrupt, its assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareholders.
The process by which a company is brought to an end and the assets of the company are redistributed. The liquidator is appointed by shareholders, unsecured creditors or following a court order, to manage the winding up of a company. The proceeds of any assets that are sold are distributed amongst the creditors. Shareholders will receive the balance of the asset sale in proportion to the number of shares held.
The degree to which an asset or security can be bought or sold in the market without affecting the price. Examples of assets that are easily converted into cash include blue chip and money market securities.
When a company decides to go public its shares are listed on a stock exchange. Listing requirements vary by exchange but would include a minimum share price and a minimum number of shareholders.
Ordinary or preferred shares that are used as collateral to secure a loan from another party. The loan will earn a fixed rate of interest and can be secured or unsecured, it is not affected by the company's profitability. Should the company go into liquidation, loan stock holders will be paid before ordinary and preferred shareholders.
London Metal Exchange (LME)
The futures exchange with the world's largest market in options and futures contracts on base and other metals. In July 2012, LME's shareholders voted to sell the exchange to Hong Kong Exchanges and Clearing for £1.4 billion.
Lump Sum Payment
A one-off payment.
A fund managed for a number of independent investors by an investment company. Each investor’s money is pooled with other investors. An investment manager then buys and sells shares or other assets on their behalf.
The name of the company that manages a fund on behalf of investors.
The individual who is the lead manager of a fund. Levels of influence on the investment decisions taken vary from fund to fund. Some managers have complete control over the distribution of the assets of the fund while others will follow a company line.
An estimation of the value of a company by multiplying the total number of outstanding shares by the current price of the stock.
A broker/dealer which accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer orders by displaying buy/sell prices for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks an offsetting order.
An order to buy or sell a stock at the best price available. Generally this type of order is carried out immediately but there is no guarantee on the price. In fast moving markets, the price at which the market order will execute often deviates from the last-traded price.
The current price for which a security can be bought or sold. With regard to shares, the market price of a stock is the most recent price at which the stock was traded. It does not guarantee that an investor will receive the same price upon buying the stock. With regard to funds, the price listed is the selling price - for the buying price consult the research section of the website.
This determines the number of shares that a market maker can trade at the quoted price. Buying or selling in amounts above the set number of shares requires price negotiation with the market maker.
The total value of the shares currently held. In other words, the number of shares held multiplied by the bid-price.
Market Value Change
A company's market value constantly fluctuates during the trading day. The market value is calculated by multiplying the current share price by the number of outstanding shares.
Market Value Percentage Change
A company's market value constantly fluctuates during the trading day. The market Value percentage change is the amount the share price has moved during the day expressed as a percentage.
Date on which a contractual agreement, financial instrument, guaranty, insurance policy, loan, or offer becomes due for settlement. Also called redemption date for investments.
Mergers & Acquisitions (M&A)
M&A are both aspects of corporate strategy dealing with the buying, selling, dividing and combining of different companies and similar entities. The key principal behind this activity is to create shareholder value over and above that of the sum of the two companies. This rationale is particularly attractive during tough economic conditions. Strong companies will act to buy other companies to create a more competitive, cost-efficient company. The larger conglomerate's aim is to gain a greater market share or achieve greater efficiency.
A unique code given to a Unit Trust/OEIC to allow it to be easily identifiable. The code consists of four to six characters consisting of letters and numbers.
The average of the bid price (selling price) and the offer price (buying price) of a security. For example, if the closing prices of a share are 107p (bid) and 109p (offer), then the mid price will be 108p.
Minimum Fund Investment
The minimum investment into a fund through Charles Stanley Direct - £500 for a one off investment or £50 monthly.
An oscillator that measures the rate of price change (as opposed to the actual levels themselves). It is calculated by taking price differences for a fixed time interval. This positive or negative value is plotted around a zero line.
A volume indicator that combines positive and negative volume with the RSI calculation. Money flow is defined as the typical daily price times today's volume. MFI is the percentage of the total money flow that is up
The process of creating the appearance that amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source.
Money Purchase Scheme
Money purchase scheme broadly means a pension scheme in which you build a pension pot from payments such as contributions and transfers from other pension schemes, and any associated investment growth. It does not include a pension scheme in which you are only entitled to defined levels of benefits on retirement.
An international agency which provides credit ratings and research.
Net Asset Value
The value of the total assets of a company less its total liabilities.
Interest received from a bank account or an investment after tax is deducted.
NEX Exchange is a Recognised Investment Exchange regulated by the Financial Conduct Authority. This means that the Exchange has exactly the same rights and privileges as London Stock Exchange plc and other European Market Operators.
The stated value of a security also known as 'face value' or 'par value'. The nominal value remains fixed for the duration of the security's life. What fluctuates is the market value which may be markedly different from its nominal value.
Nominated Advisor (NOMAD)
A company that has been approved as a nominated advisor for the Alternative Investment Market (AIM), by the London Stock Exchange. Individuals are not permitted to be nominated advisors and there are certain criteria that must be met by a company before it is approved for membership.
Means an individual who is not a dependant and who is nominated by you. The tax legislation also allows the Scheme Trustee to nominate an individual as a “nominee”, but only if there are no dependants and you have not nominated any individual or charity.
A holding registered with a third party for ease of administration and potentially to reduce costs. The customer remains the actual holder although it will be the nominee name that will be listed on the share register.
These provide a shareholder with very little or no vote on corporate matters. They are usually provided to those who want to invest in the company's profitability and success at the expense of voting rights on the direction of the company. Preference shares are typically non-voting.
Certain equities and funds cannot be traded on the Charles Stanley Direct web site. In particular, old-style "retail funds" have been replaced with "clean unit funds" as a result of the Retail Distribution Review. You may find that searching for the name of the fund will reveal both an old-style "retail" and a new-style "cleanly priced" fund; the latter of which should be tradable on the site. If you need any assistance you should contact the helpdesk.
OBV – on balance volume
A technical indicator calculated by keeping a running total of the volume. When the price closes higher or lower than the previous day the volume is added or subtracted respectively.
Occupational Pension Scheme
A retirement savings plan provided by an employer for the benefit of its employees. The defined benefit scheme (final salary) used to be the most common version but these have steadily declined over the last few years due to their increasing costs. Defined Contribution Schemes, such as Group Personal Pension or Group Money-purchase Schemes, are generally the only type now offered to employees in the private sector.
OEIC (Open Ended Investment Company)
A type of fund that invests in other companies and securities. Different types of investment strategies are used dependent upon the sector in which the OEIC is listed. OEICs have a single price directly linked to the value of the fund’s underlying investments. There is no bid/offer spread.
The price at which a market maker is prepared to sell a security. The opposite is bid price which is the price that is quoted for purchase.
Ongoing Charges Figures
This is a charge taken annually for managing the fund and includes (where applicable) the Annual Management Charge (AMC), operating and administration costs (for example, custody and reporting costs), stock lending costs, the costs of the underlying funds in a fund of funds.
The price of the security at the start of the trading session. This will include the results of closed session trading after the end of the previous trading session.
Open Ended Funds
A type of fund that does not have restrictions on the amount of shares it will issue. These funds have a high liquidity ratio making them accessible to both buyers and sellers. However, if the Fund Manager feels that the inflows are beginning to restrict the investment strategy and performance of the fund the fund will be closed to new business.
A secondary market offering that is similar to a rights issue in which a shareholder is given the opportunity to purchase stock at a price that is lower than the current market price. The purpose of such an offer is to raise cash for the company.
A contract which offers the buyer the right, but not the obligation, to buy (call option) or sell (put option) a security or other financial asset at an agreed-upon price (the strike price) during a defined period of time or on a specific date (exercise date).
An ordinary share represents equity ownership in a company and entitles the owner to a vote in matters put before shareholders in proportion to their percentage ownership in the company. Ordinary shareholders are entitled to receive dividends if any are available after dividends on preferred shares are paid. They are also entitled to their share of the residual economic value of the company should the business be liquidated however, they are last in line after bondholders and preferred shareholders for receiving business proceeds. As such, ordinary shareholders are considered unsecured creditors.
A situation in which demand pushes the price of a security/market to a level that is not supported by the underlying fundamentals. A good example of this was the 'Dotcom' bubble of the early 21st century where companies were valued on sentiment by investors and markets.
Overseas Pension Scheme
An overseas pension scheme for which the scheme manager has signed an undertaking to inform HMRC if the scheme ceases to be a overseas pension scheme and comply with any prescribed information requirements imposed on the scheme manager by HMRC.
A condition in which the price of an underlying asset has fallen sharply to a level below its true value. This condition is usually a result of market over-reaction or panic selling.
A 'Penny Share' is a loose term used to describe shares which have a speculative appeal because of their low value. There is no official rule to define when a stock becomes a Penny Share and different observers may use different criteria. Most brokers will stipulate that a penny share must have a value below some upper limit - which can be anything from 50p up to £1.
Pension input period
Pension input period means the period (sometimes less than a year) ending in a tax year, for which the total Pension inputs made by or for you to registered pension schemes are tested against the annual allowance for that tax year.
Pension inputs include gross contributions paid to your SIPP and any other registered pension schemes of which you are a member, by you, your employer and anyone else, and benefit increases in defined benefit and cash balance registered pension schemes.
The transfer of the deferred benefits from an occupational pension scheme to a personal pension or stakeholder pension scheme. Pension switches occur when the cash accrued in one personal pension plan is transferred to another.
The increase or decrease in value of an investment expressed in percentage terms.
Percentage change in value
The change in the market value less book cost/tax cost expressed as a percentage.
The value of a holding in a portfolio expressed as a percentage of the portfolio as a whole. This is particularly useful in identifying investments that are more dominant in a portfolio and may require rebalancing to better meet objectives.
Personal Equity Plan (PEP)
Introduced originally in 1986, PEPs allowed investors to save with all income and growth received tax free. Upon the introduction of ISAs in 1999 it was no longer possible to make additional contributions to PEPs. In 2008 all remaining PEPs became ISAs however, many investment companies still maintain a link to the PEP by naming the ISA as 'ISA nee PEP'.
Personal Pension Plan
An individual investment plan the purpose of which is to build a capital sum to provide benefits for retirement. Contributions can be made on a regular basis or as a lump sum and attract tax relief at the marginal rate of the investor. Up to 25% of the accumulated fund can be taken as a Pension Commencement Lump Sum when the plan's benefits are taken - this is currently tax-free.
Phased retirement is the term given to the process by which retirement pensions are split into segments which are then treated separately - useful for tax planning.
PIBS (Permanent Interest Bearing Shares)
Shares issued by building societies that pay a fixed rate of interest. They cannot be sold back to the society but can be bought and sold on the stock exchange, which means the price varies.
Usually used to identify the name of the plan or product that a client has either invested in or paid a premium for.
The company that undertakes to issue the policy documents or contract note relating to the investment or premium paid. The company is responsible for all record keeping until the plan matures or is cashed in.
Plans and products are categorised dependent upon what their aims are. For example, a plan designed to produce an income in retirement would be termed a pension (i.e. the plan type).
A formal document, provided by the issuer which give details of the contract such as the sum assured, premium and payment frequency and the term of the contract.
The cumulative value of all the holdings in a portfolio.
The right of certain shareholders to maintain ownership of a constant percentage of a company's shares. Such shareholders have the first opportunity to purchase new shares in the company proportionate to the percentage of shares already held.
Shares in a company which give their holders an entitlement to a fixed dividend but which do not usually carry voting rights. In the event of a winding up, preference shares are usually repayable at par value, and rank above the claims of ordinary shareholders (but behind bank and trade creditors). Preference shares may be issued with the right of conversion into ordinary shares. These are called convertibles.
A payment required to secure a contract which can be a lump sum or on a regular basis. Also called a 'Contribution'.
The gross profit of a company after deducting expenses and interest payments. Used to calculate liability to Corporation Tax.
The final price published at the end of the trading session. It will not take into account any closed session trading.
The difference in monetary terms between the current asking price and previous closing price.
Price Percentage Change
The difference in percentage terms between the current asking price and previous closing price.
Price to Book Ratio
Also called a P/B ratio, it is the ratio between the market price of an ordinary share and the book value of the share. The higher the ratio, the higher the premium the market is willing to pay for the company. A low ratio may signal a good investment opportunity, but the ratio is less meaningful for some types of companies, such as those in technology sectors. This is because such companies have hidden assets such as intellectual property which are of great value, but not reflected in the book value.
Price-earnings ratio (P/E ratio)
A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as market price per share divided by earnings per share. For example a company with a share price of 100 pence and an earnings per share of 10 pence has a price-earnings ratio of 10 (100/10).
‘Primary Protection’ means that the value of pension funds of an individual, who has a valid Certificate of Primary Protection from HMRC, at the time they are crystallised, will be measured against a personal lifetime allowance which exceeds the standard lifetime allowance by a certain factor. This form of protection was only available to individuals whose pension savings on 5 April 2006 exceeded £1.5 million.
Profit and Loss Account
The profit and loss account is a record of the firm's trading activities over a period of time. It reveals how well the firm has traded over the time period concerned (usually the last 6 months or year) and shows how much the firm has earned from selling its product or service, and how much it has paid out in costs (production costs, salaries etc). The net of these two is the amount of profit they've earned.
The total invested, including any additional costs in relation to the purchase, such as commission.
A method of analysis which investigates the non-quantifiable aspects of a company. This would include brand image, morale of staff and the reputation of the company.
The number of shares/units held.
An indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company.
Quote Driven Market
An electronic stock exchange system in which prices are determined from quotations made by market makers or dealers. Also known as a "price driven market".
A company whose shares can be bought or sold on the Stock Exchange.
Repayment of bonds or other debt securities on or before their maturity date.
The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation. Certain currencies have been redenominated a number of times over the last century for various reasons. A recent example of redenomination was when the euro was introduced and the denomination of many European securities had to be changed to the euro.
The name given to securities whereby ownership is registered with the issuing company or their agent. Transfer of ownership can only take place with the owner's consent.
Regulatory News Service (RNS)
The London Stock Exchanges service which ensures that price sensitive information from listed companies, and certain other bodies, is distributed to all RNS subscribers at the same time.
Relative Strength Index
The Relative Strength Index (RSI) measures a share price relative to itself and its recent history. It is calculated as the average of the prices for days where the price rose divided by the average of the prices for days where the price fell. The RSI ranges between 0 and 100.
Relevant UK Earnings
For most people, this is their salary before tax or, if they are self-employed, their taxable profit. It does not include, for example, interest on savings, dividends on shares or pensions.
Relevant UK Individual
Includes someone who is resident in the UK at some point in the current tax year or has Relevant UK Earnings.
The process of transferring a security held in electronic form to a certificated form.
Retention of Income
Accumulation units in a fund do not pay physical dividends. Instead, on the ex-dividend date, the unit price is adjusted upward to reflect the dividend distribution. These adjustments will increase your tax cost for the holding and will appear on your Stock Movements page and your Securities Report as “Retention of Income”.
Retirement Annuity Contract (RAC)
Prior to 30th June 1988, people not in pensionable employment (employment where no pension scheme exists) or people who were self employed were able to qualify for tax relief for contributions made to a pension scheme known as a retirement annuity under sections 226 of the Income and Corporation Taxes Act 1970. Although RACs were replaced by personal pension plans from 1st July 1988 those already in force may continue to operate.
Return of Capital
A return from an investment that is not considered income. The return of capital is when some or all of the money an investor has in an investment is paid back to him or her, thus decreasing the value of the investment.
Return on Capital
A ratio used in the assessment of the performance of a company and quantifies how well a company generates cash flow relative to the capital it has invested in its business.
Return on Capital Employed (ROCE)
A measure of the returns that a company is realising from its capital. Calculated as profit before interest and tax divided by the difference between total assets and current liabilities. The resulting ratio represents the efficiency with which capital is being utilised to generate revenue.
An offer made by a quoted company to its shareholders to enable them to buy new shares in the company at a discount to the market price. Existing shareholders are usually offered shares in proportion to their existing holding. For example in a one for five rights issue, a shareholder would be invited to buy one new share for every five shares already owned. The new shares are offered at a discount to the current market price.
Risk and Reward
A ratio used to compare the expected returns of an investment with the amount of risk undertaken to capture these returns. This ratio is calculated mathematically by dividing the amount of profit the investor expects to have made when the position is closed (i.e. the reward) by the amount they could lose if the price moves in an unexpected direction (i.e. the risk).
The sale date refers to the date on which the holdings were liquidated, or alternatively the target date on which it is planned that the holdings be liquidated.
The issue of additional shares by a company to shareholders in lieu of a dividend. The shares have an equivalent cash value to the dividend. No dealing charges or stamp duty is payable on the issue of the new shares.
An issue of shares made by a company free of charge to existing shareholders. Also called a bonus issue.
The Stock Exchange Automated Quotation system (or SEAQ) is a system for trading mid-cap London Stock Exchange (LSE) stocks. Stocks need to have at least two market-makers to be eligible for trading via SEAQ. Only stocks that are not listed on the FTSE100 can be traded on SEAQ.
SEATS Plus is a trading system that handles the trading of all AIM and listed UK equities whose turnover is insufficient for the market making system or the Stock Exchange Electronic Trading Service (SETS).
The sector in which the stock is listed on the London Stock Exchange, for example mining, software and computer services.
A financial instrument which represents an ownership position in a publicly traded corporation (stock), a creditor relationship with a governmental body or corporation (bond) or rights to ownership as represented by an option.
People who run their own business and take responsibility for its success or failure. They can decide how, when and where they do their work, but can hire other people to do some or all of the work at their own expense.
Self Invested Personal Pension (SIPP)
The name given to the type of UK-government-approved personal pension scheme, which allows individuals to make their own investment decisions from the full range of investments approved by HM Revenue & Customs (HMRC). SIPPs, in common with personal pension schemes, are tax "wrappers", allowing tax rebates on contributions in exchange for limits on accessibility. The HMRC rules allow for a greater range of investments to be held than Personal Pension Plans, notably equities and property. Rules for contributions, benefit withdrawal etc. are the same as for other personal pension schemes.
The automated trading system introduced in 1997 for the largest companies quoted on the main list of the London Stock Exchange. Trades through SETS match buyers and sellers automatically, cutting out the need for a market maker, theoretically meaning a narrower bid-offer spread.
Payment of cash for securities bought and delivery of securities against payment.
The date by which the buyer of a security must pay the seller. The settlement date depends upon the type of security traded. For example, stocks usually have a settlement date three days after the trade date but government bonds must be settled on the next trading day.
A certificate which confirms ownership of a shareholding. If shares are held in certificated form, the certificate must be delivered to the market upon sale.
Share Incentive Scheme
Introduced to the UK in 2000, they offer employees the opportunity to participate in the success of the company for which they work. Contributions are taken directly from salary before tax and national insurance are deducted with the scheme running for a period of 3 years. After 3 years, the saver has several options available. Firstly, they can buy shares in their company at a pre-determined price and then sell them immediately. Secondly, keep the shares purchased or thirdly have the savings returned in full.
A right to buy or sell shares at an agreed price at a time in the future.
The capital employed in a company, calculated by deducting the book value of the liabilities from the book value of the assets. Also called net assets, net worth and shareholders' equity.
A unit of ownership in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitles them to an equal distribution in any profits, if any are declared in the form of dividends. A share can be quoted or unquoted and ordinary or preference shares.
Non-trading firm formed (and often listed on a stock exchange) as a vehicle to (1) raise funds before starting operations, (2) attempt a takeover, (3) prepare for a public offering of shares, or (4) provide a front for an illegal business.
The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.
Small Cap Stock
A small-cap stock has a low market capitalisation when compared to those listed on the FTSE100. Investors may perceive a small-cap stock as having greater growth potential than a large-cap stock. A small-cap stock may be more likely than a large company to adopt or create innovative new technologies or services. A small-cap stock often has a lower level of institutional interest, as many funds have limits on the percentage of a company they may own. This in turn increases the trading volatility of a small-cap stock, potentially allowing for more extreme (more profitable) entries and exits.
Small Self Administered Scheme (SSAS)
A SSAS is a company pension scheme where the members are usually all company directors or key staff. A SSAS is set up by a trust deed which allows members/employers greater flexibility and control over the scheme's assets.
The difference between which the price of a stock is bought and sold. Some collective investments, such as Unit Trusts, also operate bid/offer spreads.
Stakeholder Pension Plan
Stakeholder pensions aim to provide a low-cost, transparent and flexible way for people on low incomes to make additional provisions for their retirement. Money invested in stakeholder pensions is invested in the stock market. On retirement a quarter of the accumulated capital can be taken as a tax-free cash sum, with the balance to be used to purchase an annuity.
Stamp duty is payable on purchases of shares using a stock transfer form, on some transfers of interest in partnerships and on land or property tansactions entered into before 1 Dec 2003.
Stamp Duty Reserve Tax (SDRT)
SDRT is a tax on shares and securities when you buy through the stock market or a stock broker.
Standard & Poors
An international agency which provides credit ratings and research.
State Earnings Related Pension Scheme (SERPS)
Introduced in 1978, SERPS was a top up to the basic state pension with the amount received dependent upon the National Insurance Contributions paid. In 2002 it became the State Second Pension.
Stepped Preference Shares
Preference shares with dividends that increase annually by a specified amount and with a predetermined capital return.
The name and classification of the security held. The company name is detailed first followed by the abbreviated version of the type of share held (e.g. ORD means Ordinary Share) and then the currency that the share is held in (e.g GBP = sterling)
Stock Exchange Daily Official List (SEDOL)
A unique identifier assigned to all securities trading on the London Stock Exchange and other smaller exchanges in the UK. The SEDOL is seven characters in length and comprises a combination of letters and numbers.
Live streaming of share prices is available when logged in and when the portfolio is ordered by holding alphabetically, rather than by a numeric value (which would cause the order of rows to change constantly). The prices you see are those that the traders see on their trading screens.
An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues shares for the first time, it selects an arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues shares for the first time, it selects an available ticker symbol for its securities which is then used to place orders - each symbol is unique. For example, the shares for Microsoft are listed as MSFT.
A corporate action where one company makes a bid for another. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
HMRC apply a number of rules when determining the cost for UK tax purposes. The 'Tax Cost' represents the cost of the holding once such rules have been applied.
A FTSE index launched in 1999 by the London Stock Exchange to reflect the growth at that time in internet and technology stocks. To be included, a company must be committed to technological innovation and listed on the exchange. It includes biotechnology companies as well as internet stocks and software companies. The TechMARK 100 is a subset of the TechMARK all-share and both have an upper market cap limit so as to exclude the largest companies.
An offer to purchase some or all of shareholders' shares in a corporation. The price offered is usually at a premium to the market price.
An advanced or rapidly progressing incurable illness. In the opinion of an attending consultant and/or Chief Medical Officer the life expectancy of the sufferer would be no more than 12 months.
Tax Exempt Special Savings Account; a former tax-free savings scheme(available 1991-99).
Total Expense Ratio
The Total Expense Ratio (TER) accounts for all the costs in running an investment fund. As well as the Annual Management Charge, the TER would include trading fees, legal fees, auditor fees and other operational expenses. The TER is expressed as a percentage and is calculated by dividing the monetary cost of running the fund by the fund's total assets.
Total Ongoing Charges
This includes the Ongoing Charges Figure plus Transaction costs plus Incidental costs. Please note that whilst we endeavour to show all charges associated with specific funds, sometimes this is not possible due to the information not being made available by the fund provider. In such cases transaction or incidental cost information may be missing.
An index fund that tracks a broad market index or a segment of it. Such a fund invests in all, or a representative number, of the securities within the index. Also know as an "index fund".
The time by which you must place your trade on the website in order for it to execute within the next available valuation point.
The last known trading price.
The time at which the last deal for the security was completed.
The coding applied to the trade confirming the transaction that has been completed. A - An automatic trade generated by the system through automatic execution. U - Uncrossing Trade - this is used for the single uncrossing trade, detailing the total executed volume and uncrossing price as a result of a SETS auction. N - Negotiated Trade - LSE uses an Automated Trading Service (ATS) to execute our real-time online deals. Restrictions imposed by the ATS may mean that certain stocks or order sizes cannot be traded automatically. If this is the case then you will be given the option to place a 'Negotiated Trade' order. The order will be forwarded electronically and securely to our dealing team. They will manually execute your order as soon as possible and at the best price available in the market at the time of dealing. O - Ordinary Trade - the transaction that was not covered by any of the other trade types listed. T - Over the Counter Trade - a security which is not traded on an exchange, usually due to an inability to meet listing requirements. S - Systematic Internalises - are obliged to publish prices for trading with their customers and are allowed to improve prices when dealing in retail size or with retail clients. CT - The trade reported for a transaction previously executed automatically through the order book. LC - Late Correction - the error trade reported that has been last corrected. OC - OTC Trade correction. SC - SI trade Correction.
The quantity of the security traded at the last known price.
This is a charge taken annually for managing the fund and includes (where applicable) the Annual Management Charge (AMC), operating and administration costs (for example, custody and reporting costs), stock lending costs, the costs of the underlying funds in a fund of funds.
The monetary amount available which can be moved to another financial product. For example, the proceeds of a Cash ISA can be transferred to a Stocks and Shares ISA.
Refers to the direction of security prices. An uptrend is a succession of higher highs and higher lows. A downtrend is a succession of lower highs and lowers lows. Trends are classified as Major (one year or longer), Intermediate (one to six months) and Minor (one month or less).
In a derivative or warrant, the security, property, or other asset that gives value to the derivative or warrant. For example, in an option giving the right to buy stock in a share, the underlying asset is the share. An underlying asset may mean many things, such as a physical commodity, a security, a piece of land, or part of a business.
Latest price of fund holdings.
Unit trusts are collective funds that allow private investors to pool their money in a single fund, thus spreading their risk across a range of investments, getting the benefit of professional fund management, and reducing their dealing costs. Unit trusts are open-ended in contrast to investment trusts, which are closed funds. Different trusts have different investment objectives: for example investing for income or growth, in small companies or large, and in different geographical regions.
Unquoted shares are shares which are not traded on stock exchanges or other regulated financial markets.
The current value of the total number of shares listed for the security.
The strategy of selecting stocks that trade for less than their intrinsic values. Value investors actively seek stocks of companies that they believe the market has undervalued. They believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with the company's long-term fundamentals. The result is an opportunity for value investors to profit by buying when the price is deflated.
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A comprehensive view of the investments in your account.
The extent to which the price of a security or commodity, or the level of a market, interest rate or currency, changes over time. High volatility implies rapid and large upward and downward movements over a relatively short period of time; low volatility implies much smaller and less frequent changes in value.
The amount of trading sustained in a security or in the entire market during a given period. Especially heavy volume may indicate that important news has just been announced or is expected.
The W-8BEN form is provided by the United States Internal Revenue Service (IRS), and its purpose is to allow non-US persons to receive a reduced rate of taxation on any US-sourced income. For the purposes of share-dealing, US-sourced income refers to income (dividends, interest etc) received from businesses registered or incorporated within the US. If you require a W-8BEN form or a replacement W-8BEN form, please contact us and we will issue you one, alternatively you can download the form here. For an example of how to complete the W-8BEN please see here.
A certificate, usually issued along with a bond or preferred stock, entitling the holder to buy a specific amount of securities at a specific price at some point in the future. The set price is usually higher than the price of the security at the time the warrant is issued. In the case that the price of the security rises to above that of the warrant's exercise price, then the investor can buy the security at the warrant's exercise price and resell it for a profit. Otherwise, the warrant will simply expire or remain unused. Warrants are listed on options exchanges and trade independently of the security with which they are issued.
The percentage of the investment applied to your basket of funds.
Ex dividend; used after a share price to show that a dividend (payment of part of a company's profits to shareholders) has been announced but that the seller of the share will receive it, not the buyer.
The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.
Zero Coupon Bond
A zero-coupon bond (also called a discount bond or deep discount bond) is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or have so-called "coupons," hence the term zero-coupon bond. When the bond reaches maturity, its investor receives its par (or face) value.
Zero Dividend Preference Shares
A preference share that does not pay a dividend. Instead, the shareholder receives an agreed-upon, fixed amount when the share is redeemed. As with all preference shares, in the event of liquidation, holders are entitled to receive proceeds from liquidation before any common shareholders.
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