Investing Terms

Appreciation

Increase in the value of an investment over time.

Smart-beta

A smart beta is an investment strategy used by a certain type of exchange traded fund (ETF) that takes more factors into account when choosing assets for the benchmark than a traditional ETF.

Passive management

Passive management is an investing style whereby investment portfolios try and generate returns that mirror the returns of the underlying constituents of the portfolios. Portfolios may be built using exchange traded funds (ETFs) which track the performance of a stock index or other underlying security. For this reason, index investing is a type of passive […]

Passive investment

Passive investment is an investment strategy which seeks to track a benchmark or an index, rather than outperform it (the aim of active investment).

Open

Open has several definitions within investing. It can refer to the daily opening of an exchange, and an order or position that has not yet been filled or closed.

OCF

Investment funds charge two types of fees. The first is a ‘one-off’ charge, whereby the fund will take a percentage of an investor’s money on entry. The second refers to the ongoing charges figure, which takes the wide variety of costs of running the fund into account, such as operating costs, annual management charge (AMC), […]

ISA

ISA stands for individual savings account, a form of UK investment that is exempt from tax on its returns.

Investor

An investor is any person who devotes capital to an investment in the hope that they will see a return from it. However, in the investment community, investors tend to have a different attitude to investing than traders.

Investment grade

Investment grade is a rating applied to a municipal and corporate bond with a low risk of default.

Full Replication

In investments, full replication refers to a type of physically replicated ETF that holds equities in all of the constituents of the benchmark it is designed to track.