‘Tax efficient investments’
Tax efficient investments is a generic term for investments that offer some form of tax relief on contributions, income or capital gains. In the UK, for example, ISAs are a common form of tax efficient investments - see 'individual savings account'.
A ticker is a short code or name representing a security (a share/stock or other type of asset) listed on an exchange or otherwise publicly traded. Every listed security has a unique ticker symbol, facilitating the huge volumes of trade orders that flow through the financial markets every day.
In contrast to a bottom-up style, a top-down fund manager will make investment decisions based on the macro-economic environment and related data rather than on stock specific criteria. Sector and country allocation will both be made in this way, with stock selection made according to index weightings rather than its own particular characteristics. Some fund managers use both techniques, using top-down factors to make asset allocation decisions and bottom-up criteria to make stock selection decisions. See also 'bottom-up.
The total return on an investment is made up of capital appreciation (or depreciation) and any income paid out by the investment. Measured over a set period, it is expressed as a percentage of the value of the investment at the start of that period.
A tracker fund does not attempt to outperform a particular benchmark, but instead aims to replicate a particular index's performance by buying the same constituent shares of the index in the same percentage sizes. Success will be measured by the 'tracking error' - the amount by which the fund's return differs from that of the index. Tracker funds are also known as index funds or passive funds.
In the UK, the Treasury is the government department responsible for all financial and fiscal decisions and for the regulation of the financial services sector. It is overseen by the Chancellor of the Exchequer.
In a unit trust, the Trustee oversees the actions of the fund manager on behalf of unit holders (investors). It ensures the fund manager adheres to the investment restrictions of both the unit trust and the regulations of the relevant regulatory body. The Trustee fulfills the same role as the Depositary for OEICs.
‘Typical gross exposure’
Gross exposure is the total of a fund's long exposure plus its short exposure. For example, a manager who has an 90% long exposure and 50% short exposure, has a gross exposure of 140%, and a net exposure of 40%. Typical gross exposure is the usual total exposure of the fund, commonly expressed in a range of exposures. Also see 'net exposure'.
‘Typical net exposure’
Net exposure is a fund's long exposure less its short exposure. Net exposure is a measure of the extent to which a fund’s portfolio is exposed to market fluctuations. The fund manager will adjust the net exposure in accordance with his or her investment outlook – bullish, bearish or neutral. A fund has a net long exposure if the percentage amount invested in long positions exceeds the percentage amount invested in short positions, and has a net short position if short positions exceed long positions. For example, a manager who has an 90% long exposure and 50% short exposure, has a net exposure of 40% and a gross exposure of 140%. Typical net exposure is the usual net exposure of the fund, commonly expressed in a range of exposures. Also see 'gross exposure'.