SJP Jargon buster
Our goal is always to ensure our communications are straightforward and jargon-free. Where the use of specialist language is necessary – whether for accuracy or because there are no suitable alternatives – we’ll explain it here.
Please get in touch with us if there are any terms you’d like us to add.
Active management is a reference in fund investing. It means a professional investor is making decisions on where, how and in what the fund is invested.
A grouping of assets, such as equities, bonds, and property, that share characteristics.
The central bank of the UK, responsible for setting interest rates and maintaining financial stability.
This is the debt of a company or government and acts like an “I owe you”. An investor who buys a bond is in essence lending money to that institution in return for repayment on a specific date, plus regular interest payments. Also known as fixed income.
A standard against which an investor can compare the performance of an investment or asset class.
Where money is exchanged between buyers and sellers in the form of equities, bonds and other financial assets. Examples include the stock market and the bond market.
The increase in value of an investment - selling it for more than you bought it for.
Reinvesting the income earned from your investment so your original amount grows and potentially generates additional earnings over time.
A nation with an advanced economy, well developed infrastructure, and higher living standards.
Based on the principle that it’s unwise to put all your eggs in one basket, diversification is the risk-reducing practice of investing in a variety of assets that perform well at different times.
A measure of how sensitive an investment is to interest rate changes. For example, the higher a bond’s duration, the more its price will tend to fall when interest rates rise.
A share of ownership in a company, also known as a stock, which is listed and traded openly on a stock exchange.
A nation rapidly transitioning to a modern, industrial economy with a higher standard of living.
see Bond.
Money pooled together by people with a common objective and invested in assets, such as equities and bonds. An example of a fund’s objective could be to achieve capital growth and income over the long term.
Instead of investing in a pool of assets like equities and bonds, this fund invests in other funds often to access specialist skills or asset classes.
A bond issued by the UK government. Traditionally, these were presented on gold-edged certificates, earning them the name ‘gilt’.
An index is a tool that helps investors understand how a particular part of the market is performing without having to analyse individual assets. For example, the S&P 500 Index summarises the performance of the 500 largest companies listed in the US, giving an overall reflection of US stocks.
The rate at which prices for goods and services rise.
An account that allows UK residents to save or invest their money tax-efficiently. Interest or investment returns within the ISA are not taxed. There are different types of ISAs, including Cash ISAs and Stocks and Shares ISAs.
St. James's Place do not offer a Cash ISA.
A large company listed on a stock exchange. A company’s size is determined by its market value, or “capitalisation”, which in the case of mid-cap stocks tends to be more than $10 billion.
How quickly an investment can be sold without affecting its price.
A medium-sized company listed on a stock exchange. A company’s size is determined by its market value, or “capitalisation”, which in the case of mid-cap stocks tends to be between $2 billion and $10 billion.
An investment approach that makes use of more than one type of asset class. For example, a multi-asset fund might invest in a mix of equities and bonds.
If a fund is open-ended, it allows investors to buy or sell units at any time. A unit trust is an open-ended fund.
An investment strategy that aims to replicate the performance of an index by tracking it, which means holding the same stocks in similar percentages. This is a considered a low-cost way to invest.
Think of this as all your investments put together, including any funds and individual assets you hold.
An investment strategy that uses mathematical models, algorithms, and artificial intelligence to make decisions about buying and selling assets. By analysing large amounts of data, investors seek to identify patterns and trends that can indicate investment opportunities.
Parts of the economy made up of similar business activities or characteristics. For example, transportation is a sector that includes vehicle manufacturing, rail and airline industries.
A term that can generally be used interchangeably with equities and/or bonds.
A small company listed on a stock exchange. A company’s size is determined by its market value, or “capitalisation”, which in the case of mid-cap stocks tends to be between $250 billion and $2 billion.
When an open-ended fund restricts investors from buying or selling, usually due to market conditions or difficulties in valuing assets.
A type of open-ended fund.
The gradual closure of a fund, where investments are sold off and capital is returned to investors.
The income returned from an investment, expressed as a percentage.
The value of an investment with St. James's Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
