THE DE-JARGONISER
Investing can feel like it’s written in a different language. The De-Jargoniser is our way of cutting through that noise. Every card here takes a piece of investment terminology and explains it in plain English, what it means and why it matters. No shortcuts, no dumbing down, just clear explanations.
Shares in a company that give you part-ownership and a claim on its future profits. Their value rises and falls with the company’s performance and wider market conditions. Equities can offer long-term growth, but prices can fluctuate significantly in the short term.
EQUITIES
Essentially loans to governments or companies and sometimes referred to as Sovereign or corporate bonds respectively. You receive interest (called a coupon) and get your money back at the end of the bond’s life. Bonds are often seen as steadier than shares, but they can still lose value if interest rates rise or issuers face trouble.
BONDS
Physical goods like oil, gold, wheat, or copper. Their prices move with supply and demand, weather events, and global politics. Commodities can act as diversifiers in a portfolio because they often respond differently than shares or bonds, but they can also be volatile.
COMMODITIES
Investing in real estate, either directly (buying buildings) or indirectly (through property funds or listed real estate companies). Property can provide rental income and potential long-term growth, though it can be less flexible to buy or sell than shares or bonds.
PROPERTY
Investment in businesses that aren’t listed on public stock markets. Often used to support growth, buyouts, or restructuring. It can offer higher potential returns but also carries higher risk, less transparency, and typically longer investment periods before you see results.
PRIVATE EQUITY
Multi-asset investing means blending different types of investments, like shares (equities), bonds, property, and cash, into one fund or portfolio. The idea is that by mixing assets, you spread risk and reduce the impact of any one area struggling. It’s a way to build resilience while still aiming for growth, without relying on a single investment type.
MULTI ASSET
Value investing focuses on companies that appear undervalued compared with their fundamentals, such as earnings, assets, or book value, or trading below what’s seen as their ‘intrinsic value.’ The idea is that the market has overlooked their potential, and over time it will correct, recognising their true worth. This style often calls for discipline and patience, as it may take time for that value to be realised.
VALUE
Momentum investing is based on the idea that assets performing well recently may continue to rise in the near term. The strategy involves buying into upward trends and selling once those trends begin to fade. It seeks to capture short-term market momentum, though reversals can happen quickly.
MOMENTUM
GARP (Growth at a Reasonable Price) is a blend of growth and value investing. GARP investors look for companies with solid growth potential but without paying an overly high price. It’s about balancing ambition with discipline.
GARP
Investing in companies with a history of steadily increasing dividends. The appeal is both income today and the potential for that income to grow over time, which can help keep pace with inflation. It aims to take advantage of compounding income returns over time.
DIVIDEND GROWTH
Growth style investing focuses on companies expected to grow earnings faster than the market average. These shares often trade at higher prices relative to today’s profits, with the hope that strong future growth justifies it. Typically, tech, healthcare and smaller companies tend to be found in fund portfolios bias to this style.
GROWTH
Capital preservation means keeping your original money as safe as possible. The aim is to avoid losses rather than chase significant gains. It’s often the priority for cautious investors or those who need their money in the short term, such as retirees. Think of it as protecting your investments, even if it means smaller returns.
CAPITAL PRESERVATION
Total return looks at everything you gain from an investment, not just the share price going up, but also dividends or interest you receive along the way. It’s the complete picture of growth and income combined. By focusing on total return, you get a fairer view of how an investment is really performing over time.
TOTAL RETURN
Alternative assets go beyond the usual shares (equities) and bonds. They include things like private equity, hedge funds, infrastructure, or collectibles. The idea is to add different sources of return that may move differently from mainstream markets. Alternatives can offer diversification but are often more complex, less liquid, and sometimes higher risk.
ALTERNATIVES
Ready-made portfolios are ‘off the shelf’ investment solutions built for you by professionals. They’re designed to match a certain risk level; cautious, balanced, or adventurous, without you needing to choose individual funds. The appeal is simplicity: one decision gives you a diversified portfolio. They suit people who want investing handled in a straightforward, time-efficient way.
READY MADES
Buying all (or most) of the securities in a market index, such as the FTSE 100 or the S&P 500. This approach aims to match market performance rather than beat it, usually at lower cost and with more transparency.
INDEX INVESTING
Passive funds aim to track the performance of a market index, such as the FTSE 100 or S&P 500, rather than trying to beat it. They typically hold all (or a representative sample) of the investments in that index. Because the approach is rules-based and doesn’t rely on stock-picking, costs are often lower. Passive funds can be a simple way to mirror the market’s ups and downs, offering broad exposure without making active bets.
PASSIVE FUNDS
Active funds are run by fund managers who make decisions about which investments to buy and sell in pursuit of a return higher than the market or a benchmark. Managers may use research, analysis, or judgment to pick companies, bonds, or themes they believe will perform better. Active funds can provide more flexibility and the potential for outperformance, but they usually carry higher costs, and results depend on the manager’s process and philosophy and the impact that has on their choices.
ACTIVE FUNDS
All-cap funds invest in companies of every size, from the largest global giants to tiny, fast-growing newcomers. This broad approach gives exposure to a mix of opportunities across the market. It avoids the limits of focusing only on large, mid, or small companies. For investors, it’s a way to spread bets widely and capture growth wherever it appears.
ALL CAP
Large-cap companies are the big names, usually worth billions and often household brands. They’re seen as more stable, with global reach and established markets. Growth may be steadier and slower compared to smaller firms, but they can offer resilience and reliability. For many investors, large caps form the backbone of a diversified portfolio.
LARGE CAP
Mid-cap companies sit between the giants and the minnows. They’re often established but still have room to grow. This middle ground can offer a balance: more growth potential than large caps but usually less risk than small caps. For investors, mid caps can provide a mix of stability and opportunity, depending on the sector and timing.
MID CAP
Small-cap companies tend to be younger, at the fast-growing end of the market. They may be innovative, niche, or expanding into new areas. Returns can be exciting if they succeed, but risks are higher, some may struggle or fail. Investors often use small caps to add growth potential to a portfolio, accepting the bumps along the way.
SMALL CAP
Government bonds are essentially loans you make to a government. In return, you receive regular interest payments and the promise that your money will be repaid at the end of a set period. They’re generally seen as lower risk than company bonds, though that depends on the country’s financial stability. For many, they’re a steady anchor in a portfolio.
GOVERNMENT BONDS
Corporate bonds are loans to companies. You lend money to a business, and they agree to pay you interest plus your original investment back at the end. The risk depends on how strong the company is, big stable firms tend to be safer, while struggling ones carry more uncertainty. They often pay higher interest than government bonds.
CORPORATE BONDS
INVESTMENT GRADE
Investment grade bonds are considered safer loans to governments or companies with strong financial health. Independent rating agencies grade them as more likely to meet their debt obligations. They usually pay less interest than riskier bonds, but they aim to offer greater security. Investors often use them as a reliable income stream within a balanced portfolio.
HIGH YIELD
High yield bonds are issued by companies or governments seen as riskier. Because of this extra risk, they pay more interest. Some call them ‘junk bonds,’ but that doesn’t mean they’re worthless, just less financially secure. For investors willing to take on more uncertainty, they can offer attractive income, but the chance of loss is higher too.
CONVERTIBLE BOND
A convertible bond is a type of loan to a company that pays interest but can later be swapped for shares in that company. At first, you earn income like a regular bondholder. If things go well and the share price rises, you may have the option to convert into equity and benefit from that growth. It’s a hybrid, part bond, part stock, designed to balance income with potential upside.
ASIA EX-JAPAN
‘Asia ex-Japan’ means investing in Asian markets but leaving Japan out. Japan is often treated separately because of its size, maturity, and unique economy. This category focuses on fast-growing economies like China, India, and South Korea. For investors, it’s a way to capture Asia’s growth while avoiding the distinct characteristics of Japan’s market.
EMERGING MARKETS
Emerging markets are countries moving up the economic ladder, such as Brazil, India, or South Africa. They often grow faster than developed economies but come with more volatility. Investing here means exposure to younger populations, rapid urbanisation, and new industries. The trade-off is greater risk, political change, unstable currencies, or weaker regulation can create bumps.
FRONTEIR MARKETS
Frontier markets are the ‘next wave’ of developing countries, even smaller or earlier-stage than emerging markets. Examples include Nigeria, Vietnam, or Bangladesh. They can offer exciting growth potential as economies modernise, but risks are high: less liquidity, weaker institutions, and less regulated. For investors, they’re a high-risk, high-reward way to access untapped regions.
Global investing means looking everywhere, with no regional limits. A global fund might hold companies or bonds from the US, Europe, Asia, and beyond. The advantage is diversification: your returns don’t depend on just one economy. It’s a broad, flexible way to spread exposure worldwide and capture opportunities wherever they appear.
GLOBAL
UK investing means focusing on companies or bonds from the United Kingdom. This includes everything from global giants listed in London to smaller domestic businesses. For UK investors, it may feel familiar and reduce currency risk. However, it also ties performance to the UK’s economy, politics, and global position. It’s often a core but not the whole picture.
UK
US investing covers the world’s largest economy and stock market. It includes tech giants, healthcare leaders, and a wide range of global businesses. The US has historically dominated equity markets, but it comes with its own cycles and risks. For investors, it often represents growth and innovation, though valuations can sometimes run high.
US
Europe investing covers countries in the European continent, excluding or including the UK depending on definition. It brings exposure to diverse economies, from Germany and France to Spain and the Nordics. While growth can be slower than some regions, Europe often offers stability, income, and strong multinational businesses. For investors, it adds breadth and balance to portfolios.
EUROPE
Investing in Japan means focusing on one of the world’s largest and most advanced economies. Japan is known for global brands, high-tech industries, and a strong export market. At the same time, it faces challenges like an ageing population and slower growth. For investors, Japan offers innovation and stability, but with its own set of risks.
JAPAN
Asia investing covers the whole region, including Japan, China, India, and emerging economies like Vietnam. It’s one of the most diverse and dynamic parts of the world. Growth potential is often high, but risks vary from politics to currency shifts. For investors, Asia offers access to booming populations, expanding middle classes, and global trade powerhouses.
ASIA
A measure of how different a fund is from its benchmark index. A high active share means the manager is making more distinct choices, while a low active share means the fund is close to simply tracking the index. 70% plus it typically considered high active share.
ACTIVE SHARE
The amount a fund or portfolio beats (or falls short of) its benchmark after adjusting for risk. Positive alpha suggests added value; negative alpha suggests underperformance by the fund manager.
ALPHA
A measure of how an investment moves compared to the overall market. A beta above 1 means it tends to move more aggressively than the market; below 1 means it’s steadier.
BETA
When a fund gradually shifts away from the investment style it promised (for example, a ‘Value’ fund buying Growth stocks). This can change its risk and return profile, sometimes without investors realising.
STYLE DRIFT
How much and how quickly an investment’s value moves up and down. High volatility means bigger swings, low volatility means steadier moves. It’s not inherently ‘bad’ or ‘good’, it’s just one way of understanding risk.
VOLATILITY
When an investment trust (or company) borrows money to invest more. This can amplify gains if markets rise but also magnify losses if they fall.
GEARING
Yield is the income you earn from an investment, shown as a percentage of its value. It could come from interest, dividends, or other payouts. For example, if you invest £1,000 and receive £50 in a year, the yield is 5%. It’s a way to compare the income potential of different investments. Remember: yield reflects return today, not a guarantee of tomorrow, and higher yields often carry higher risks.
YIELD
Duration is a measure of how sensitive a bond’s price is to changes in interest rates. A higher duration means the bond is more affected when rates move.
DURATION
Liquidity describes how quickly and easily you can buy or sell an investment without affecting its price too much. Cash in a bank account is highly liquid, you can access it instantly. Shares in large companies are also fairly liquid, as there are usually many buyers and sellers. By contrast, property or private equity may take much longer to sell, making them less liquid. Understanding liquidity helps you match investments to your needs for access and flexibility.
LIQUIDITY
Financial contracts whose value depends on another asset (like a share, bond, or commodity). They can be used to manage risk or to speculate, but they can also be complex and risky if not understood well.
DERIVATIVES
Cumulative performance is the total return of an investment over a set period, without breaking it down by year. For example, ‘+25% over 5 years.’
CUMULATIVE RETURNS
Discrete performance is shown year by year (or period by period), making it easier to see how returns varied over time.
DISCRETE RETURNS
Ethical investing is about choosing investments that align with your values. This could mean avoiding industries like tobacco or gambling, or supporting areas such as renewable energy or fair labour practices. It’s not a one-size-fits-all approach, what’s ‘ethical’ varies from person to person. The key idea is balancing financial goals with personal principles, so your money can reflect what matters most to you while still seeking a return.
ETHICAL
Ethical investing is about choosing investments that align with your values. This could mean avoiding industries like tobacco or gambling, or supporting areas such as renewable energy or fair labour practices. It’s not a one-size-fits-all approach, what’s ‘ethical’ varies from person to person. The key idea is balancing financial goals with personal principles, so your money can reflect what matters most to you while still seeking a return.
EXCLUSIONS BASED
Positive change investing looks at companies or funds aiming to create long-term benefits for people and the planet, alongside financial returns. It focuses on themes like healthcare, clean energy, or education. The idea isn’t charity, but aligning investments with progress that matters. For some investors, it’s about shaping a better future while seeking growth.
POSITIVE CHANGE
Impact investing is about putting money into companies, projects, or funds that aim to make a measurable positive impact on society or the environment, alongside generating financial returns. Examples might include renewable energy projects, affordable housing, or education initiatives. Unlike simply avoiding ‘harmful’ industries, impact investing actively seeks to create change. It’s for investors who want their capital to contribute directly to outcomes they care about.
IMPACT INVESTING
SDR (Sustainability Disclosure Requirements) is a UK regulation that sets standards for how investment firms must report on environmental, social, and governance (ESG) factors. The aim is to improve transparency so investors can better understand how sustainability issues are considered in funds and products. For retail investors, SDR aims to helps cut through ‘greenwashing’ by making sustainability claims more consistent and easier to compare.
SDR
Shariah investing follows Islamic principles. This means avoiding businesses involved in activities like alcohol, gambling, or interest-based banking. Instead, it focuses on ethical and socially responsible areas such as healthcare or technology. It’s designed for Muslim investors but can appeal to anyone who values these filters. The goal is to combine faith-based values with financial returns.
SHARIAH
Ethical investing is about choosing investments that align with your values. This could mean avoiding industries like tobacco or gambling, or supporting areas such as renewable energy or fair labour practices. It’s not a one-size-fits-all approach, what’s ‘ethical’ varies from person to person. The key idea is balancing financial goals with personal principles, so your money can reflect what matters most to you while still seeking a return.
Exclusions-based investing means deciding what you don’t want in your portfolio. You, or a fund manager on your behalf, might exclude sectors such as tobacco, weapons, or fossil fuels. By removing certain industries, investments can be better aligned with personal values. This approach doesn’t dictate where to invest, it simply sets clear boundaries on what you, or a manager, choose not to support.
Under MiFID rules (Markets in Financial Instruments Directive), investment firms must clearly show all the costs linked to your investments. This includes management fees, platform charges, and transaction costs, both upfront and ongoing. The aim is transparency, so you can see the total impact of charges on your returns and compare options more easily. By setting out costs in pounds and percentages, MiFID helps investors make more informed, confident decisions.
MiFID
OCF (Ongoing Charges Figure) is a measure of the costs involved in running a fund, expressed as a percentage each year. It includes management fees and other expenses but not things like transaction costs.
OCF
A performance fee is a payment an investment manager earns if returns exceed a certain level, sometimes called a ‘hurdle rate. Instead of charging only a fixed management fee, the manager is rewarded when the fund performs well. This structure aims to align their interests with yours, though it can also create incentives for risk-taking. Understanding how these fees are calculated helps you see the true cost of your investment and who benefits when.
PERFORMANCE FEE
UCITS (Undertakings for Collective Investment in Transferable Securities) is a European framework that sets rules for funds. UCITS funds are designed to be transparent, well-regulated, and widely available to everyday investors across Europe and the UK. They follow strict guidelines on what they can hold, how much risk they can take, and how they must report to investors. Think of UCITS as a ‘quality stamp’ that aims to give investors confidence in the standards applied.
UCITS
LTAFs (Long-Term Asset Funds) are a type of fund designed to give investors access to less liquid assets, like infrastructure, private companies, or real estate. These investments can’t usually be bought and sold quickly, so the fund is structured for long-term horizons. The idea is to open up opportunities previously available mostly to institutions. For individual investors, LTAFs can offer diversification, but also require patience, as your money is tied up for longer.
LTAFs
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OEIC (Open-Ended Investment Company) is a type of fund where your money is pooled with other investors to buy a range of assets. ‘Open-ended’ means the fund creates or cancels shares as investors join or leave, so its size can grow or shrink. The value of the shares of the OEIC are based on the NAV (net asset value) of the funds underlying investments. While similar to a Unit Trust and OEIC is legally structured as a company.
OEIC
Listed on the stock exchange these are companies that pool money to invest in assets, much like funds (Unit Trusts and OEIC). Their shares trade on the stock market, which means the share price can be higher or lower (premium or discount) than the value of the assets inside (the NAV or net asset value). They can also use ‘gearing’ (borrowing) to try to boost returns.
INVESTMENT TRUST
ETPs (Exchange Traded Products) are funds that trade on stock exchanges like Investment Trusts and shares. This group includes ETFs (exchange-traded funds), ETC (exchange traded commodities) and ETNs (exchange-traded notes). They usually track an index, commodity, or basket of assets, offering transparency and ease of trading during market hours.
ETPs
A fund structure that pools money from many investors and buys a portfolio of a wide range of assets, such as equities, bonds and commodities. Unlike investment trusts, unit trusts are not traded on an exchange, instead, units are created or cancelled directly by the fund depending on demand. While a Unit Trust is open-ended unlike an OEIC they are legally structured as trust
UNIT TRUST
ICAV (Irish Collective Asset-Management Vehicle) is a fund structure based in Ireland, commonly used structures used by large global asset managers for providing access to investors in the UK and EU under UCITS passporting rules. Like OEICs, ICAVs are open-ended and can hold a range of assets. They’re popular because of their flexibility and tax efficiency, though the concept is similar to other pooled funds.
ICAV
SICAV (Société d’Investissement à Capital Variable) is a common fund structure in Europe, especially Luxembourg. Like ICAVs, they are open-ended and allow investors to pool money to access a portfolio of assets. The legal wrapper is different, but the principle is the same: broad access to investments via one vehicle. Like ICAVs they’re popular because of their flexibility and tax efficiency, though the concept is similar to other pooled funds.
SICAV
NAV (Net Asset Value) is the total value of a fund’s assets minus its liabilities, divided by the number of
NAV
A tender offer is when a company or investment trust invites investors to sell back some or all of their shares at a set price, usually for a limited time. Think of it as the organisation saying, ‘We’ll buy your investment directly from you, here’s what we’ll pay, and here’s the window.’ It can be above or below the market price. Knowing why the offer is being made helps you decide whether to accept or hold.
TENDER OFFER
A buy back happens when a company repurchases its own shares from the market. By reducing the number of shares in circulation, each remaining share represents a slightly larger slice of the business. Companies may do this to signal confidence, return surplus cash to investors, or improve financial ratios. For you as a shareholder, a buy back can increase the value of your holding, though the benefits depend on timing, price, and the company’s motives.
BUY BACK
A stock split is when a company increases the number of its shares by dividing existing ones into smaller units. For example, one share might become two, or ten. While the number of shares you hold goes up, the overall value of your investment stays the same, like slicing a pizza into more pieces without changing its size. Companies often split shares to make them look more affordable and boost market accessibility.
STOCK SPLIT
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