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Private investors

Glossary of terms

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

‘Fact find’

Most financial advisers will conduct a 'fact find' with a new client to establish details such as current income and outgoings, current investments and objectives, etc. The information gained is used as a basis for providing meaningful financial advice.

‘Factsheet’

In the context of investment management, a factsheet is a document that provides information about a fund - typically the fund's objective, the stocks and assets in which the fund invests, the performance of the fund, the risks of investing in the fund, and other relevant information for investors and potential investors.

‘Financial adviser’

A financial adviser is a professional who offers advice on financial matters to individuals and recommends suitable financial products. Advisers are usually regulated by the Financial Conduct Authority and must follow a strict code of conduct. Individuals can consult an adviser on a range of financial matters including investments, retirement planning, insurance, protection, mortgages and other loans. A financial adviser may also advise on some tax and legal matters. Visit https://www.unbiased.co.uk for help finding a financial adviser.

‘Financial Conduct Authority (FCA)’

The Financial Conduct Authority regulates the financial services industry in the UK. Its aim is to protect consumers, ensure the industry remains stable, and promote healthy competition between financial services providers. It has rule-making, investigative and enforcement powers that it uses to protect and regulate the financial services industry. (Source FCA). The FCA was created in April 2013. Previously, its role was undertaken by the Financial Services Authority. Visit www.the-fca.org.uk for more information.

‘Financial Services Authority (FSA)’

The Financial Services Authority was the regulator of financial services in the UK from 1997 until April 2013, when the regulator become the Financial Conduct Authority.

‘Financial Services Compensation Scheme (FSCS)’

FSCS is the compensation fund of last resort for customers of authorised financial services firms. The scheme is designed to protect private investors from financial loss as a result of the default of an authorised (ie- regulated) investment company. Visit www.fscs.org.uk for more information.

‘Fixed income securities’

A fixed income security is an alternative term for a bond or similar instrument which obligates the borrower to pay a fixed amount of interest during the period of issue and to repay the issue price when the instrument expires. Many different types of institution issue fixed income securities, such as governments, publicly held companies, banks etc.

‘Fixed interest’

Fixed interest refers to a fixed income security, which is an alternative term for a bond or similar instrument which obligates the borrower to pay a fixed amount of interest during the period of issue and to repay the issue price when the instrument expires. Many different types of institution issue fixed income securities, such as governments, publicly held companies, banks etc.

‘Focus’

Part of the objective of a fund - for example, focusing on growing the capital value of the fund or aiming to achieve income for holders.

‘Forward pricing’

Units or shares in a fund are priced on a forward basis when they are bought or sold by the manager at a price which will be fixed at the next valuation of the fund.

‘FTSE 100 Index’

The FTSE 100 Index, also called FTSE 100, FTSE, or, informally, the "footsie", is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation. It is one of the most widely used stock indices and is seen as a gauge of business prosperity for business regulated by UK company law. The index is maintained by the FTSE Group, a subsidiary of the London Stock Exchange Group. FTSE stands for Financial Times Stock Exchange.

‘FTSE 250 Index’

The FTSE 250 Index is a capitalisation-weighted index consisting of the 101st to the 350th largest companies listed on the London Stock Exchange.

‘FTSE All-Share’

The FTSE All-Share Index is a capitalisation-weighted index, comprising around 1000 of more than 2,000 companies traded on the London Stock Exchange. It aims to represent at least 98% of the full capital value of all UK companies that qualify as eligible for inclusion.

‘FTSE SmallCap’

The FTSE SmallCap Index is an index of small market capitalisation companies consisting of companies from the 351st largest listed companies on the London Stock Exchange main market onwards.

‘Fund manager’

In the context of fund management, a fund manager is the person who runs a fund and makes investment decisions.

‘Fund objective’

A fund's objective is what the fund aims to achieve. It sets out in broad terms the remit and focus of the fund and guides the fund manager in his or her overall selection of stocks or assets.

‘Fund of funds (FOF)’

A 'fund of funds' is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment.

‘Fund size’

A fund's size is its net asset value, being the total value of a fund, measured by taking the total value of its assets, less its liabilities. It is effectively the total value of all investments in a fund.

‘Funds’

A fund is a generic term for many different types of collective investment schemes, such as unit trusts, OEICs, investment trusts, venture capital trusts, hedge funds, etc.

‘Futures’

A future is an agreement to buy or sell an asset such as a bond or equity, on a specific date in the future at a price that is agreed today. Futures can be used either to hedge or to speculate on the price movement of the underlying asset. For example, a producer of maize could use futures to lock in a certain price and therefore reduce the risk of future price falls (known as hedging).


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