Glossary

Term Definition
Asset Anything having commercial or exchange value that is owned by a business, institution or individual.
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.
Capital growth Occurs when the current value of an investment is greater than the initial amount invested.
Corporate bonds Fixed income securities issued by a company. They are also known as bonds and can offer higher interest payments than bonds issued by governments as they are often considered more risky.
Coupon The interest paid by the government or company that has raised a loan by selling bonds.
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.
Net asset value (NAV) A fund’s net asset value is calculated by taking the current value of the fund's assets and subtracting its liabilities.
Volatility The degree to which a given security, fund, or index rapidly changes. It is calculated as the degree of deviation from the norm for that type of investment over a given time period. The higher the volatility, the riskier the security tends to be.
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.