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Glossary
A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z
A
Actively Managed
A fund is actively managed if there is a fund manager, or team of fund managers who pick the securities to have in their portfolio. Its opposite is Passively Managed.
Asset
Anything that is capable of being owned and producing value. This can include financial assets such as stock, bonds and cash or physical assets such as land and machinery.
Asset Class
Securities that contain similar characteristics and behaviour in the market.
B
Benchmarks
See our section on Benchmarking for more information.
Bonds
A purchase of debt from a company or government. The issuer of the bond then pays the investor interest at certain intervals over the length of the loan, these payments are called coupons.
C
Capital
The term broadly means the money available for a company to spend on improving itself. It has slightly different definitions depending on where it’s used. Capital expenditure refers to expenditure expected to reap future benefits. Capital appreciation can refer to the rising price of securities, and is a goal for investment funds.
CHP
Combined Heat and Power, a form of energy generation that utilises the heat by-product of energy generation.
Combustion Engine Vehicle
A vehicle which uses the burning of fuel to power its engine.
Commodity
A physical good, such as oil or metal. A commodity used for trading will be homogenous; each individual commodity will not be differentiated.
Crown Rating
Crown Ratings are compiled by Financial Express. See their site for more information.
CSR
Corporate Social Responsibility
D
DECC
The UK government Department for Energy and Climate Change, which provides policy, legislation and research in these issues.
Defra
The UK government Department for Environment, Food and Rural Affairs, which provides policy, legislation and research into environmental and sustainable issues.
Desalination
The process of distilling water to remove salt and other minerals to make it suitable for use in agriculture, industry or consumption.
Dividend
A part of the company’s profits paid out to shareholders.
E
Environmental Investment
Investing in companies operating in environmental industries such as water, energy efficiency, carbon emissions or forestry. This category also includes funds that are focused on climate change. See: What is an environmental fund?
ESG
Environmental, Social, and Governance issues that may be considered for investment.
ETF
Exchange Traded Fund, this is a security that tracks an index or a commodity, and is itself traded on an exchange.
Ethical Screening
The application of ethical criteria in order to screen out companies that may be deemed by a fund manager as unsuitable for investing in. See our section on Ethical Screens for more information.
Equity
If a fund holds equity, this means they hold shares of stock in companies. A stock is a type of security.
Ethical Fund
A fund which applies Ethical Screens. The term may be used in other ways, which we have discussed in an article.
F
Fixed Interest
A security that provides payments on a pre-determined schedule, an example is a bond.
Fuel Economy
The ratio between distance travelled and fuel used. In the US this is measured in miles per gallon and in the EU as litres per 100km.
FTSE100
An index of the 100 companies listed on the London Stock Exchange (LSE) with the highest market cap.
Fund
A collective investment where many individual investors pool their money to invest in securities.
Fund Manager
For an actively managed fund, the fund manager, together with analysts and researchers, makes the decisions as to which securities will be in the investment fund.
G
Green Fund
A fund which takes into account Environmental factors when making investments, such as an environmental thematic fund. The term may be used in other ways, see: What is a Green fund?
Green Investment
Usually implies that environmental considerations are taken into account when investing. It can also mean that ethical screens are used. The term may be used in other ways, see: What is a Green fund?
Growth
A strategy aiming to increase the value of the investment, this is comparable to a focus on Income.
H
Holding
If a fund has a holding in a security it means that that security is invested in by that fund.
I
ICVC
Investment Company with Variable Capital, the term is used interchangeably with OEIC.
IFA
Independent Financial Adviser: they provide guidance on suitable financial products for clients, which can include which investment fund is right for them.
Income
A strategy aiming to provide regular payments to investors, for example by distributing dividends instead of reinvesting them.
Index
A measure of performance of a group of securities, examples of indices include the FTSE100, or the S&P500.
Interest Rate
The rate a borrower has to repay additional to the initial borrowing, or the rate a saver receives on their savings. These are usually in percentages.
Investable Universe
The total pool of securities available to a fund manager to hold in their investment fund.
J
K
kWh
Kilo-Watt hour, is a unit of energy commonly used in electricity bills equivalent to 1000 watts operating for one hour. Mega-Watt, Giga-Watt, Terra-Watt and Peta-Watt hours are larger units of energy.
L
M
Managed Funds
Funds under the control of a Fund Manager, as opposed to passively managed funds.
Management Fee
An amount charged for the active management of a fund.
Market Cap.
Market capitalisation, the share price of a company multiplied by the total number of shares.
Microfinance
The provision of financial services to those on low incomes, such as small loans without collateral.
Mpg
Miles per gallon, a measure of fuel economy.
Multi-Asset
Invests in more than one type of financial asset.
Mutual Fund
See Unit Trust.
N
Nuclear Power
The use of nuclear fission to generate heat which then generates energy.
O
OIEC
Open-Ended Investment Company, a collective investment that can adjust the amount of shares in the fund, so that the price is based on the underlying assets. They differ from unit trusts in that they can invest in individually managed sub-funds.
Open-Ended
The fund can adjust the amount of shares in the fund, so that the price is based on the underlying assets.
P
Passively Managed
A passively managed fund has a pre-determined strategy and doesn’t include stock picking. Passively Managed funds are often linked to an index, an example is a fund which is invested solely in the FTSE100 companies. Its opposite is Actively Managed.
PENS
Pension fund.
Platform
A service that enables investors to buy investments. This normally comprises of either a Fund Wrap or Fund Supermarket.
Policy
In general, means a proposed course of action, in terms of government, public policy means a guideline of action that is to be taken by the government, generally leading to future legislation.
Portfolio
A grouping of financial assets. This could be a personal portfolio possibly including different funds, or a fund portfolio containing the fund holding. A portfolio may contain cash as well as funds or securities.
Positive Engagement
When the investment manager, or investment management company, is involved in discussions with the boards of the companies they are invested in. This may be to encourage companies to improve on environmental or governance issues.
Q
R
Region
The geographic area a security is listed or an organisation is incorporated.
Renewable Energy
The generation of energy from naturally replenished resources such as air, wind, water or light. Sometimes biomass is also included under “renewable”.
Responsible Fund
A fund which incorporates Environmental, Social, and Governance (ESG) issues into its investment process together with its financial analysis. The term may be used in other ways, see: What is Responsible Investment?
Retail Investment
Investment by individuals personally rather than for another organisation.
Return
Ratio of money gained or lost relative to the amount invested.
S
Scarcity
The concept of limited supply facing potentially unlimited human needs.
Sector
A market including companies that are all in a similar industry or related to the same product or service.
Securities
A financial instrument. The term includes bonds, stocks, funds and derivatives.
Share
A 'stock' or 'share' in a company represents part ownership. The stock will have a value, and may also entitle the owner to dividends.
SICAV
An open-ended collective investment mainly used in Europe, the acronym can be formed from the French, Spanish or Italian for “Investment Company with Variable Capital”. The closed-end version is an SICAF.
Size
The size of a fund is the total amount of money invested in it.
SRI
Socially Responsible Investment, including environmental and ethical investment.
SRI Fund
SRI may either stand for Socially Responsible Investment, but more recently SRI funds have rebranded to Sustainable and Responsible Investment. An SRI fund may apply ethical screens, or consider Environmental, Social, and Governance (ESG) issues when investing. The term may be used in other ways, see: What is an SRI fund?
Stock
A 'stock' or 'share' in a company represents part ownership. The stock will have a value, and may also entitle the owner to dividends.
Sub-Fund
A section of a fund, that may be independently managed, which is invested in by another investment fund. It could be that a thematic fund has sub-funds that specialise in those themes.
Sustainable
An activity which helps meet the needs of the present without compromising the ability of future generations to meet their own needs. Worldwise Investor does not use this term to classify funds. The term may be used in other ways, see: What is Sustainable Investment?
T
TER
Total Expense Ratio.
Thematic Investing
Investing in companies that are involved in specific areas or 'themes'.
TRR
Total Rate of Return, this is the price return added to the dividend return.
Turnover
With regards to investment funds, turnover is a measure of the volume of securities bought or sold over a period of time. Low turnover means that securities are kept for a long time whereas high turnover means that securities are often bought and sold.
U
UNEP
United Nations Environmental Programme is the coordinator for environmental projects from the UN, this includes research and funding into environment and development projects.
Unit Trust
An open-ended collective investment where profits can be passed to share owners rather than being invested back into the fund. Also known as a 'mutual fund' in the US.
UNPRI
United Nations Principles for Responsible Investment, is a list of six principles that investors, companies or other organisations can sign up to.
V
Volatility
A measure of price variation over time, it refers to the past changes in price over a certain period. It can be expressed as a percentage.
W
X
Y
Yield
The rate of return to a security. This doesn’t include price variations, which are included in the Total Rate of Return.
Z
Get investment advice
Speak to a specialist adviser for help in choosing the right green or ethical investment.
The value of ethical and green investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks of investing. Our aim is to provide you with the best information we can to help you make decisions about ethical and green investments. It is not to advise you on the suitability of an investment to your personal circumstances. Nothing written on the site should be considered personal advice, nor do Holden & Partners accept liability for any inaccurate information on the site. If you are unsure about the suitability of an ethical and green investment please contact Holden & Partners or your financial adviser.