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Accumulating share class
A fund class retaining and reinvesting income within the fund. Its value is reflected in the units; extra units need not appear in your account. Accumulation alone grants no tax exemption.
Active management
Choosing investments/exposures within a mandate using judgement, often to outperform a benchmark. It can involve long ownership. An ETF can be active: dealing format says nothing about whether decisions justify their costs.
Bond
A debt security giving a contractual payment claim against its issuer, rather than business ownership. Payments can fail and the market price can change before repayment.
Cash sweep
Automatic movement of unused brokerage cash into a destination such as a deposit or money market fund. That destination determines return, access and protection; a displayed cash balance does not identify it.
Coupon
A bond’s interest payment. A fixed 3% annual coupon on €1,000 face value promises €30 yearly before tax. Coupon rate is not total return: payment reliability and purchase price matter.
Default
Failure to meet a debt obligation, such as timely interest/principal payment. Payments can be delayed, reduced or missing. Recovery depends on the claim, issuer and legal process; default need not mean total loss.
Distributing share class
A fund class paying income to holders under its policy. The payment forms part of total return, adding nothing beyond that result. A broker’s automatic reinvestment service is separate.
Distribution
A fund payment to holders from income, realised gains or capital. Other things unchanged, paying value out reduces remaining NAV. Distributions can occur during a negative total-return period.
Dividend
A company payment to shareholders, usually from earnings/reserves. Ordinary dividends can be reduced or omitted. Overall gain also depends on changes in the shares’ value.
ETF
Exchange-traded fund: investors normally trade its shares on an exchange at market prices, which can differ from NAV. It can be active or index-tracking; format establishes neither strategy nor diversification.
Face value (par value)
For ordinary fixed-principal bonds, the contractual principal due for repayment and basis of the coupon rate. Paying above/below face value means repayment need not return the purchase price.
Fund
An arrangement pooling investors’ money under stated objectives/rules. Investors own units/shares in it. Its portfolio can be concentrated; the fund structure alone establishes no adequate diversification.
Fund unit or share
A holding representing an interest in fund assets after liabilities under its terms. Value can change without unit count changing. You do not directly own each underlying security in your account.
Index
A performance measure for investments selected/weighted under rules. Coverage can be broad or narrow. The calculation itself cannot be bought directly; a product may seek to track it.
Index fund
A fund seeking to track a specified index through full holdings, sampling or other permitted methods. Costs/implementation can cause return gaps. Tracking alone guarantees neither broad coverage nor protection.
ISIN
International Securities Identification Number: a 12-character instrument code. Match a fund’s exact class in issuer documents. The identifier does not settle its listing, trading currency, access rights or suitability.
Market capitalisation
Share price multiplied by shares outstanding. Capitalisation-weighted indexes give larger measured companies more weight, possibly adjusting eligible share counts. High unit price alone does not imply company size; check coverage/weighting rules.
Maturity
The contractual date principal falls due, without guaranteeing payment. An ongoing bond fund generally has no corresponding date promising return of your purchase cost, although underlying bonds mature. Defined-maturity funds are an exception to ongoing operation; a termination date still does not guarantee repayment of your purchase cost.
Money market fund
A fund holding short-term debt and other permitted liquid instruments. Check assets, currency, expenses and redemption terms. It is not a bank deposit; its name/stable-looking price guarantees neither capital nor immediate access.
Net asset value (NAV)
Fund assets minus liabilities; NAV per unit divides the relevant net assets by unit count. A one-class fund’s €2 million across 100,000 units gives €20 each. ETF market price can differ.
Passive management
Following specified index rules instead of discretionary investment forecasts. Index changes/flows still require implementation. Coverage can be concentrated; repeatedly switching index funds can make an investor’s allocation actively managed.
Price-to-earnings ratio (P/E)
Share price divided by earnings per share for a stated historical period or forecast. These bases differ. One earnings multiple establishes neither fair price, guaranteed growth nor a cheap investment in a successful business.
Prospectus
Formal disclosure of investment objectives, operation, risks and charges. Match the actual fund/class. A factsheet does not replace full terms, and disclosure does not establish suitability.
Replication
How a fund obtains index exposure: all securities, sampling or derivatives. Each method has implementation risks that the index name does not reveal.
Share class
An interest in the same fund with specified fees, eligibility or income handling. Classes can produce different investor results despite sharing a portfolio. Confirm the exact class.
Stock (share)
Company ownership, also called equity. Value depends on the business and what others will pay; rights vary by class. Ordinary shareholders have no fixed-return promise and can lose their investment on failure.
Ticker
A trading symbol within a particular market/provider system. One class can have different exchange tickers; symbols can be ambiguous without venues. Confirm instrument identifier and listing together.
Treasury bill
Short-term government debt. US bills here sell at a discount or face value and repay face value at maturity. Earlier sales depend on market price; issuer, currency and terms still matter.