Common Financial Terms

Quantitative easing

Quantitative easing (or QE, for short) is an economic monetary policy intended to lower interest rates and increase money supply. It saw an increase in profile and use after the 2008 financial crash and subsequent recession.


A pension is a long-term savings scheme that involves putting money away, whilst employed, for retirement. Regular amounts put into pension schemes build up over time and then provide an income, and potentially a lump sum, once a person reaches a certain age.

Net income

Net income is the total amount of profit (often known as earnings) made by a company, listed in its earnings report.

Net asset value

A fund’s net asset value (NAV), refers to the underlying value of its holdings if they were all to be immediately sold, usually divided by the number of shares in circulation.

Junior ISA

Junior ISAs are tax-free savings accounts for those under the age of 18 and living in the UK. As with ISAs for adults, there are two types: a cash Junior ISA and a stocks and shares Junior ISA. Money can be invested in both types, as long as the total amount invested in one year […]

Interest rate swap

An interest rate swap is an agreement to exchange interest payments from a financial instrument for interest payments from another financial instrument.

Inflation Risk

Inflation risk, also referred to as purchasing power risk, is the risk that inflation will undermine the real value of cash flows made from an investment.


Deflation, in contrast to inflation, is a general decrease in the price of goods and services. More specifically, it happens when the rate of inflation is less than 0% or when, over time, the value of money increases.


A custodian is a person or institution that holds an investor’s securities, either digitally or physically, for safekeeping.

Currency Hedging

Currency hedging, also known as foreign exchange/forex hedging, is the act of entering into a financial contract in order to protect against movements in foreign exchange rates. Financial investors and businesses use hedging like an insurance policy, and tend to use the likes of futures contracts or options to achieve this.