skip to content.

Private investors

Glossary of terms

From A to Z, understand investment jargon with our glossary of terms

‘Basis point’

A basis point is equal to one hundredth of one per cent. When analysts refer to interest rates being decreased by 50 basis points, they mean, for example, from 6.0% to 5.5%.

‘Bear market’

A bear market is a falling market - ie- when share or other asset prices are going down. In contrast, a bull market is a rising market, when prices are going up.


A benchmark is a standard (for example, a stockmarket index, or other market measurement), which a fund manager will use as a comparison against the performance, risk and holdings of his/her fund portfolio.


Beta represents a measurement of the expected volatility of an investment compared with the volatility of the market as a whole during the same period. A beta of 1.0 indicates that an investment is likely to closely follow the market's movement, while a beta lower than 1.0 indicates lower volatility than the market. If beta is a negative number, it is likely that the investment and the market are moving in opposite directions.

‘Bid price’

The bid price is the price at which units in a unit trust fund are usually sold. ie- the price which investors will receive when they sell their units. Also see 'cancellation price'. Shares in an OEIC funds are usually sold (and bought) at the 'mid price' - see 'mid price'.

‘Bid/offer spread’

The bid/offer spread is the amount by which the asking price for a unit of a unit trust fund (the offer price) exceeds the bid price. This is essentially the difference between the highest price that a buyer is willing to pay and the lowest price for which a seller is willing to sell for.

‘Bloomberg code’

Bloomberg is a commercial organisation providing financial news and data services. It assigns unique codes to each security and fund that it tracks and provides news and data about.

‘Blue chip’

'Blue chip' refers to companies which are generally considered well established, highly regarded and usually large in size and scale.


A bond can be issued by either a company or a government and is a way of raising capital. Investors buying a bond are effectively lending money to the issuer of the bond (ie- the company or government). Most bonds will have a fixed term, at the end of which the investor will receive the original issue price, although some bonds (known as 'perpetual bonds') have no fixed maturity date. Interest is normally paid during the lifetime of the bond.


A bottom-up fund manager will build a portfolio by focusing on selecting stocks which he or she believes to be the best opportunities within their industry or sector. Economic issues and asset allocation guidelines are considered, but are not of primary importance in the construction of the investment portfolio. In contrast, a 'top-down' fund manager will make investment decisions based on the macro-economic environment and related data rather than on stock specific criteria. See also 'Top-down'.


Box is the name given to the system where unit trust managers store units that have been redeemed by unit holders for subsequent onward sale.

‘Bull market’

A 'bull market' is rising market - ie- when share or other asset prices are going up. In contrast, a bear market is a falling market, when prices are going down.

UK personal investors

I confirm that I am a UK personal investor and that I agree to and will comply with the terms and conditions of use of this website.