Glossary

Term Definition
Diversification The practice of investing in a variety of assets. This is a risk management technique where, in a well-diversified portfolio, any loss from an individual holding should have less impact on the overall portfolio.
Overweight If a portfolio is ‘overweight’ a stock, it holds a larger proportion of that stock than the comparable index or sector.
Real Returns The return on an investment, adjusted for changes in prices in an economy.
Share A unit of ownership in a company or a mutual fund. This gives investors a stake in a company, and potentially a share in its future profits.
Underlying value The fundamental value of a company, reflecting both tangible and intangible assets, rather than the current market value.
Underweight If a portfolio is ‘underweight’ a stock, it holds a smaller proportion of that stock than the comparable index or sector.