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Private investors

Glossary of terms

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

‘Earnings per share (EPS)’

Earnings per share is the calculation of the profits of a company that are attributable to each share in that company. EPS is calculated by dividing the profits of a company after tax by the number of shares in issue.

‘Eligible market’

An eligible market is one of a list of markets in which a fund is permitted to invest as a result of the provisions of the fund's prospectus.


EMEA is an acronym, short for Europe, Middle East and Africa.


Dividends paid out by a fund manager reflect the distribution of income for the whole period since any previous dividends were paid, regardless of when the units or shares were purchased. To ensure the fair treatment of all unit/shareholders, the purchase price of the fund includes a sum of money which represents the income accumulated on those units/shares up to the point of purchase. When an investor receives their first dividend, it will include an 'equalisation' payment, which is the value of the accumulated income up to the point of purchase. This in effect returns part of the purchase price and as such, is not taxable as income.


Equities is another name for shares in a company.

‘Ethical investments’

Ethical investments take factors other than simply the potential financial return of an investment into account - these can be environmental, humanitarian etc. For example, an ethical investment portfolio might not invest in tobacco or oil companies, or in companies that use cheap labour in developing countries.

‘Ex-dividend date’

The ex-dividend date, also known as the XD date, is the date on which any dividend income to be paid is taken out of the value of a fund or company's shares or units, thereby reflecting that payment in the value of the share/unit.

‘Exchange Traded Fund (ETF)’

An exchange traded fund is a fund that tracks an index, a commodity or a basket of assets like an index fund. An ETF trades like a company share on an exchange. ETFs experience price changes throughout the day as they are bought and sold. For example, an ETF holds assets such as stocks or bonds and trades over the course of the trading day at approximately the same price as the net asset value of its underlying assets. Most ETFs track an index, such as the FTSE All-Share.

‘Exchange-traded asset’

An exchange traded asset is a type of derivative - a financial instrument whose value is derived from that of another investment. Also see 'derivatives'.


'Execution-only' refers to investors who make investments directly, rather than investors who take financial advice from a professional adviser and use the adviser to make investments on their behalf.

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