Glossary

Actuary: A person who calculates risks and premiums

Annual Return: The total return on an investment which includes dividend payments and capital.

Annuity: An investment of money entitling the investor to a series of sums over a stated period.

Bankruptcy: Declared in law unable to pay debts.

Beneficiary: A person who receives benefits under a trust, policy or will.

Benefits in kind: Benefits excluding salaries given to employees by employers eg car, car fuel, medical etc.

Bond: A certificate issued by a government or a public company promising to repay borrowed money at a fixed rate of interest at a specified time.

Capital Growth: The increase in value of an asset.

Capital Structure: The components which form a company's capital (ordinary shares, preference shares, debentures etc).

Decreasing term assurance: Life insurance which decreases over the term of the policy.

Earned Income: Income that comes from work (salary, wages).

Execution Only Broker: A broker who buys and sells shares on the instructions of clients but who offers no advice.

Final Salary Scheme (Defined Benefit Scheme): A pension scheme in which an employee's pension is based on number of years of service and final salary.

Financial Adviser: A professional person qualified to give advice to clients regarding a range of financial products.

Footsie: The Financial Times 100 Share Index is a measure of Britain's top 100 companies.

Fund: A stock of money.

Fund Manager: A professional person whose role is to decide how fund money is invested.

Fund Switching: The movement of money from one fund to another.

Gain: Acquire as profits.

Hang Seng Index: The main indicator of stock market performance in Hong Kong based on 33 companies.

Health Insurance: Generic term for insurance covering costs incurred due to illness or injury.

Home Income Plan: A plan enabling the elderly owner of a property to utilise its capital value.

Index linked term assurance: Term assurance in which premiums and benefits are increased in line with a specific index.

Inheritance Tax: Tax due on an estate following the death of the owner.

Joint Life Assurance: An assurance policy usually taken out on two lives, typically husband and wife.

Lump Sum: A sum of money paid in a single installment.

Market Value: Value as a saleable thing.

Money: A current medium of exchange in the form of coins and banknotes.

NASDAQ: The first electronic stock market.

National Debt: The total debt accumulated by a government through the issue of government bonds, treasury bills etc.

Normal Retirement Age: The age at which a person normally retires.

Occupational Pension Scheme: A pension organised and managed by an organisation for the benefit of its employees.

Pension Forecast: A projection of estimated pension income upon retirement.

Pension Mortgage: A pension plan which uses the lump sum to repay a mortgage.

Pension: A regular payment made to people above a certain age.

Personal Income: A person's total income.

Phased Retirement: Gradual reduction in working hours when approaching full retirement.

Quartile: The investment industry divides performance into four equal groups.

Quote: An estimate of future returns.

Registrar of Companies: The official body with responsibility for the registration of companies.

Retire: Leave office or employment.

Safe: Not involving danger or risk.

Sale: The exchange of a commodity for money etc.

Share: A portion of an enterprise.

Stock Exchange: An association of dealers in stocks and shares, conducting business according to fixed rules.

Take home pay: The amount of money available after all deductions from salary.

Tax avoidance: The minimising of tax liability via legal activities.

Term: A specific period of time.

Testate: Having left a valid will at death.

Tokyo Stock Price Index: The index of the 1,000 largest companies quoted on the Tokyo Stock Exchange.

Tracker Fund: A fund which aims to achieve the same returns as a specific share index.

Trust Fund: A fund of money etc held in trust.

Umbrella Fund: A collective fund containing several sub-funds, each of which invests in a different asset class.

Valuation: The worth of a portfolio of investments.

Variable Interest Rate: The rate offered by an institution which is likely to fluctuate in line with the base rate.

Warrant: Securities issued by a company which give their owners the right to purchase shares in the company at a specific price at a future date.

Will: A written document usually instructing funeral wishes and how an estate is to be distributed upon death.

Xd: Ex dividend.

Xw: Ex warrants.

Year End Dividend: An additional dividend paid at the end of the trading year.

Yield: The return of money.

Zero Coupon Bond: A bond which pays no interest through its life.

Zero Dividend Preference Shares: Preference shares which receive no dividend throughout their lives.