Term Definition
Asset Anything having commercial or exchange value that is owned by a business, institution or individual.
Asset class Category of assets, such as cash, equities, fixed interest and their subcategories, as well as tangible assets such as real estate. M&G's key asset classes are equities, fixed interest, multi asset and property.
Credit The borrowing capacity of an individual, company or government. More narrowly, the term is often used as a synonym for corporate bonds.
Debt An amount of money borrowed, and therefore owed, by one party to another.
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 Bonds issued by governments.
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. There are two inflation indices in the UK – the Retail Prices Index (RPI) and the Consumer Prices Index (CPI).
Real return The return on an investment, adjusted for changes in prices in an economy.
Risk The chance that an investment's  return will be different to what is expected. Risk includes the possibility of losing some or all of the original investment.
Valuation The worth of an asset or company based on its current price.
Volatility The degree to which a given security, fund, or index rapidly change. 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.