> What is an investment trust?
> What is an ETF?
> What is a unit trust?
> What is an OEIC?
> What is gilt?
> What is an ISA?
> What is a PEP?
> What is CREST?
> What is a nominee account?
> What is RSP?
> What is AIM?
> What does ‘Ex-Dividend’ mean?
> What does ‘Cum-Dividend’ mean?
> What is the record date?
> What is PTM levy?
> What is a contract note?
> What is the p/e ratio?
> What is a CDI?
> What is a Pre-IPO?
> What is IPO?
> What is a CFD?
> What is The Plus Market?
> What is OFEX?
What is an investment trust?
A company whose business is to make money for shareholders through investment in other assets. It is a closed-end fund; shares will be listed on and traded through a major exchange, just like any other company.
What is an ETF?
A fund which tracks a particular stock market index, this can be traded on an exchange like a share.
What is a unit trust?
An investment where a number of individuals place their money with a professional manager, who manages the funds on their behalf. This can also be known as a managed investment.
What is an OEIC?
Open ended Investment Company. This works in a very similar way to a unit trust, they invest in a variety of assets to generate a return for investors.
What is a gilt?
These are generally government bonds which mature at a certain date which give you an agreed dividend until that time.
What is an ISA?
Individual Savings Account in which you can hold either stock market based investments or just your traditional savings. Any interest that is made on the savings or bonds and any capital gains made on investments held within an ISA are tax free.
What is a PEP?
Personal Equity Plans. These offered the Private Investor the most tax efficient way of investing in stock market related plans.
What is CREST?
This is an electric system for settling the sale and purchase of shares. It enables shareholders to hold and transfer their shareholdings in an electric form rather than using paper.
What is a nominee account?
This is an account in which the named holder holds the assets in it on behalf of another.
What is an RSP?
Retirement Savings Plan. This is an investment plan designed for saving towards your retirement years. They have special tax benefits; you only pay tax on the amounts that you withdraw.
What is AIM?
The Alternative Investment Market. Exchange’s market for smaller and growing companies.
What is a dividend?
This is a portion of the company’s profit paid to common and preferred shareholders; sometimes a company will pay a dividend out of past earnings, even if it is not operating at a profit.
What does ‘ex-dividend’ mean?
This is the time interval between the announcement of a dividend payment and the date that it is actually paid. Any investor that buys shares after the “ex” date is not entitled to receive a dividend.
What does ‘Cum-Dividend’ mean?
This is the opposite of ‘ex-dividend’. It means that the buyer of shares is entitled to participate in a forth coming payment.
What is the record date?
Is the date on which the shareholder must officially own shares in order to be entitled to a dividend. After the date of record the stock is said to be ex-dividend.
What is PTM levy?
This is a charge automatically imposed on investors, and collected by their brokers, when they buy or purchase shares with an aggregate value in excess of £10,000.
What is a contract note?
This is the day that a transaction takes place; the broker sends the client a document detailing the whole transaction completely.
What is the p/e ratio?
Price earnings ratio. This is used to measure how cheap or expensive share prices are. It is calculated by dividing the market value of a company by the earnings of the company.
What is a CDI?
CREST Depository Interest. CREST holds all international stocks in a pool in a local depository. CREST then issues a CDI to each holder of the security, which can then be transferred in CREST just like UK equity.
What is a Pre-IPO?
A launch of company shares in a company, before the company makes its initial public offering of securities.
What is IPO?
Initial launch of a company’s shares, when they first become available for trading on the Stock Market.
What is a CFD?
Equity Contract for Difference. This is an agreement made between two parties to exchange, at the closing of the contract, the difference between the opening and the closing prices of the underlying share, multiplied by the number of shares detailed in the contract.
What is the PLUS Market?
This was formally known as the OFEX, the PLUS Market is separate from the London Stock Exchange but authorised and recognised by the Financial Services Authority. The PLUS market provides a trading platform for the primary and secondary equity market services.
What is OFEX?
See the PLUS Market.