A financial professional who analyses companies or other investments to determine their values. An analyst is more junior than portfolio manager. They are tasked with covering a number of companies and reporting back to their teams with any ideas.
Annual Management Charge
The annual fee charged by the investment managers to you to cover the cost of running the fund.
Measuring something on a yearly basis. Over 12 months basically. If it costs £20 million a month to run a football club, the annualised cost is £20 million x 12, or £240 million because there are 12 months in a year.
A benchmark is something that both fund managers and investors use to measure how the investment is doing. It is a bucket of similar companies to the investment strategy and is used as a point of reference to check whether the investment is actually doing what it promised!
A bond is like offering your friend a £100 loan which they promise to pay back in full at the end of the year plus a monthly fee of £2 for the service you’ve provided. Throughout the year, every month (hopefully) you would get £2 from your mate and at the end of the year; your mate would give back the £100. Therefore you have got £2 x 12 months plus £100, therefore £124. Lovely jubbly. However, not all bonds get paid back and when that happens it’s called a default… That’s bad; see more on that under default.
Simply put, a bundle is a collection of different funds.Our independent Investment Committee put these bundles together based on risk but they only include funds that exist on The Big Exchange so you know they'll be making a positive impact too. By investing in multiple different funds you are spreading your chance of losing money. When investing, the old saying rings true: it’s sometimes best not to put all of your eggs in one basket.
Your cash, a business’ cash, anyone’s cash.
Capital at Risk
You'll see this disclaimer or "risk warning" around the site. It is something that we are required to let you know when making an investment decision. What we are trying to say is that when you are investing you are accepting the risk that your investments can go up in value as well as down in value and like everything in life nobody can guarantee what will happen in the future.
The ultimate way to grow your money! The concept of compound is much like a snowball rolling down the hill - as your snowball gets bigger there is more of it to benefit from the snow on the ground. Similarly, as your money gets bigger there is more of it to benefit from interest.
People who owe you money... Your colleague who you lent a tenner is most definitely a debtor. Having too many debtors is often seen as a bad thing.
This is a payment made by the company to its shareholders usually out of its profits. If a company declares a 50p per share dividend and you own 100 shares, as a shareholder you will receive : 100 divided by 50p, equals £50.
Drawdown is a bit of a negative one. It is the measurement of how much an investment goes down in a single time period (1 day). This is also used as a way to look at risk, if a fund has a high max drawdown it is seen as more risky than one with a low drawdown.
The amount a company says it has earned after paying all its costs. Having strong earnings is usually a good sign!
This is a rather fancy name for the shares in a company. If you hold equity (i.e. have some shares in a company) you are the proud owner of some of that company. On The Big Exchange however, it is the funds themselves which are shareholders of the companies they invest in, not you...
Financial Conduct Authority (FCA)
The regulator for the financial services industry. Kind of like the investment police – keeping all us little people safe.
The payment of any form of income without taking costs or tax off. If in doubt, always look at the NET number for a true reflection taking into account all costs and taxes.
An increase in the value of an asset.
See our page on ISAs here but essentially think of them as a Tax-free place to store your investments.
An impact report is what most of our Asset Manager partners will produce on an a yearly basis to show their clients the impact that the investments have made over the last year. This is a really useful document to see a summary of what the investment team have been up to, and where the fund is making a difference. We think producing a quality and transparent impact report (that shows both good and bad) is something that we see as best practice for the investment industry.
The return from an investment on a sustainable basis
A fund follows a given stock market index such as the FTSE 100 or the FTSE-All Share Index. It is impossible for a passive manager to have as much impact with a company as an active manager.
See our page on JISAs here, but essentially think of them as Junior ISA. These are tax free investment accounts for children below the age of 18.Up to £9,000 every tax year can be put in the JISA on behalf of the child by the parent or guardian. This means that when the child grows up to 18 they can have an investment account that can be turned into an ISA straight away or used for something! What's more, if it is on The Big Exchange is will have already been working for people and planet for all the time they've had it open!
The easier it is to turn an asset into cash, the more liquidity it has.
Ongoing Charge Figure ( OCF)
An OCF is the industry’s most precise measure of telling you what it costs to invest in a fund. It is made up of the annual management charge (AMC) and some other costs of maintaining and operating the fund.
Price per Unit
When you invest in a fund, you are purchasing units within that fund. The fund is made up, therefore of lots of units that people buy. The price per unit is therefore the cost of buying one of those units in the fund. You don't have to buy a whole unit to be an investor though, so don't worry. It's a good way to seeing the daily movement in the value of the fund too.
Responsible (ESG) Investing
Responsible investing and ESG funds are fairly similar. A bit like cousins. These titles are both used by investment managers to explain a certain way of investing. This way of investing is based of the principle that taking into account the real world effects and impacts of: what companies do, how and where they operate, and all the risks that come with that actually makes you have a better performing fund financially. This type of investing is really focused on protecting and growing the VALUE of the fund through managing Environmental, Social and Governance risks and is not based upon the VALUES of the investor. It is a key difference and shows how these funds are different to Impact and Ethical funds. But again, on The Big Exchange we still show you the positive impact a fund is making so you can find some common ground across all the different investment types.
The money a company makes from selling products or services.
Can you afford to take it? It will more often than not affect the return on your investment. See more about risk here.
Self-Invested Personal Pension. Like an ordinary pension but the plan holder, i.e. you, determines what you are going to fill the plan with. Hopefully some of our impact funds...
If you personally buy one share in a company, you can call yourself a shareholder. Your fund manager might be a shareholder and with this right, they can go to the annual meeting and quiz the management team about why they aren’t hitting financial or social objectives.
Something we all have to pay at some point (but not in your ISA or JISA). However, don’t avoid it or try to not pay it - it pays for our hospitals, roads and other important things!
The number that most investors care about. This is the total amount the investment has gone up or down over a certain period of time.
Yield is normally something we see on the upside down triangle sign when we are driving. Helpfully, (or not) it means something totally different here... To give an example, We have an £100 investment with a 2% yield.... Yield is therefore the £2 income every month displayed as a percentage of the whole pie. So, in this case £2 divided by £100 = 0.02 which is the same as a 2% yield.