| Term |
Definition |
| Asset |
Anything having commercial or exchange value that is owned by a business, institution or individual. |
| Asset allocation |
Apportioning a portfolio's assets according to risk tolerance and investment goals. |
| Bond |
A loan in the form of a security, usually issued by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the initial amount borrowed is repaid. |
| Capital |
Refers to the financial assets, or resources, that a company has to fund its business operations. |
| Default |
When a borrower does not maintain interest payments or repay the amount borrowed when due. |
| Developed economy/market |
Well-established economies with a high degree of industrialisation, standard of living and security. |
| Emerging economy or market |
Economies in the process of rapid growth and increasing industrialisation. Investments in emerging markets are generally considered to be riskier than those in developed markets. |
| Equities |
Shares of ownership in a company. |
| Government bonds |
Fixed income securities issued by governments, that normally pay a fixed rate of interest over a given time period, at the end of which the initial investment is repaid. |
| Inflation |
The rate of increase in the cost of living. Inflation is usually quoted as an annual percentage, comparing the average price this month with the same month a year earlier. |
| Yield |
This refers to either the interest received from a fixed income security or to the dividends received from a share. It is usually expressed as a percentage based on the investment's costs, its current market value or its face value. Dividends represent a share in the profits of the company and are paid out to a company’s shareholders at set times of the year. |