Investments Glossary

A - D, E - H, I - L, M - P, Q - T

Asset Management

The management of various securities (shares, bonds, other securities and assets such as real estate) to meet specified goals for the benefit of the investor.

Bear

An investor who believes a stock price or the overall market level will decline.

Bull

An investor who believes a stock price or the overall market level will rise.

Capital

This is the money saved, invested or borrowed by someone before interest or loss.

Consumer Price Index

This index measures the average cost of goods/services purchased by consumers.

Equity Fund

This is a grouped fund which invests in equity related assets according to an agreed investment policy.

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Fixed Term Deposit

A deposit which earns interest at a rate which is calculated based on the length of time/term it is invested for. Fixed term funds normally do not allow for early withdrawal.  A penalty may be incurred if early withdrawals are allowed

Fund Management

This is where professional fund managers manage investments on behalf of investors.  An annual fund management charge is payable for this service.

Guaranteed Equity Bond (GEB)

Deposit-based guaranteed equity bonds return your capital in full regardless of what happens to the stockmarket indices to which the return is linked. The average growth in the stockmarket index specified by the bond is calculated over the term of the bond and you are paid a percentage of any growth.

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Index

A statistical indicator that measures price movement in financial markets or the economy.

Indexation

This is where adjustments are made from time to time to contractual payments based on changes in an index e.g. consumer price index.

Inflation

The risk that the value of your money may reduce over time.  When prices increase, the amount you can purchase with your money decreases unless you earn more than the rate of inflation.

Investment

The investment of money, e.g. in a financial institution or by purchasing stocks or shares in a company, with the purpose of making a profit.

Investment Manager

It refers to both a firm that provides investment management services and an individual who directs fund management decisions.

Investment Portfolio

It is a collection of assets owned by an individual, group or company.

Irish Stock Exchange

The Irish Stock Exchange is an entity which provides "trading" facilities for stockbrokers and traders, to trade shares and other securities listed on the Irish Stock Exchange.

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Managed Fund

Where funds from a number of investors are combined to purchase, for example, stocks, shares or properties, with the purpose of making a profit.  Professional Fund Managers are employed to manage these funds for a fee.

Mutual Fund

Similar to above, this is where investors money is used to purchase units/shares in a investment fund and the monies are invested in a variety of investments such as properties, stocks, shares etc.

Passive Portfolio (Indexed)

Where investment managers take a ‘passive’ approach to managing the fund i.e. they use portfolios that are structured to provide returns to track a market index e.g. the ISEQ.

Pooled Investment

This is where a number of investors invest different amounts of money in a fund which is used to purchase a variety of assets including stocks, shares and properties.   With pooled investment, the risk for investors is spread over a different fund and administration and fund management costs may also be significantly reduced.

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Return

This is the amount an investor receives annually from his investment and it is usually expressed as a percentage.

Risk

The possibility that the investment will not yield any/as much return as expected or hoped for.

Tracker Bonds

As Passive Portfolio above.  They will normally have a fixed term, e.g. 3 or 5 years.

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Legal Notice

The information provided in this guide does not constitute tax, legal, investment or any other advice.

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