Glossary

A measure of the gain or loss expressed as a percentage of the invested capital.

The FTSE/JSE All Bond Index is a composite index containing the largest-20 vanilla bonds ranked dually by liquidity and market capitalisation. It is a summary measure of the movement in the bond market.

The FTSE/JSE All Share Index represents the largest-99% of eligible companies listed on the JSE. It is a useful measure of the movement in the equity market.

To adjust or calculate to reflect a rate that is based on any full year.

The Association for Savings and Investment South Africa.

Asisa categorises unit trusts into different sectors for rankings or comparisons.

• Asset : A useful or valuable thing, person, or quality.
• Asset class : A type of investment (such as stocks, bonds, or real estate) regarded as a discrete category, especially in the context of asset allocation.
• Investment : The process of investing money for profit or material result.

The local currency of the country the company is operating in. This is also the first currency listed in a JSE currency quote.

A standard against which the growth of a fund/portfolio can be measured.

A business news agency that provides information like news, data, research.

Debt investments in which you lend money to an entity (typically a corporate company or government) for a defined period of time at a variable or fixed interest rate.

Cash or cash equivalent usually refers to a savings or fixed-deposit account with a bank, or to a money market investment. It is generally regarded as a safe investment.

Collective investment schemes or CIS enables you to pool your money with other investors who have similar investment objectives. You buy and sell units of the scheme.

The South African CPI shows the change in prices of a standard package of goods and services which South African households purchase for consumption.

The currency in which a fund/portfolio is invested.

Process of allocating capital in a way that reduces the exposure to any one particular asset class or risk.

A dividend is a portion of a company's earnings that's normally paid out to shareholders in the form of cash.

A tax levied on the dividends received by the shareholder (investor).

An investment share (also referred to as a stock or security) issued by a company listed on a securities exchange.

• Advisory fee: The fee you pay to a financial adviser. Can be upfront and/or annual.
• Management fee: The fees an investment manager charges for managing the fund/portfolio. Can be upfront and/or annual.
• Administration fee: The amount you pay for the administration of your investment fund/portfolio.

Assets which are monetary in value that can be traded.

The institutional arrangements and conventions that exist for the issue and trading of financial instruments.

A system for buying and selling currencies of other countries.

The financial risk of an investment’s value changing due to the changes in currency exchange rates.

International financial assets that a foreign company, governments or other institutions issue (for example a share or a bond).

When we recalculate the net asset value of units after the market closes every day. As a result, any order you place can’t be quoted at a previous price and must be quoted according to the next net asset valuation we calculate.

A set of financial assets held by an investment management company. An investor can own a portion of the fund/portfolio as an investment.

Some CIS funds have multiple classes to cater for different fee structures for various types of investors (individuals, linked investment service providers, fund of funds, institutions, etc.)

A CIS fund that invests in a range of other CIS. Every fund of funds is required to invest in a minimum of two underlying CIS.

The set target of a fund/portfolio as guided by the fund/portfolio mandate.

The set target range the investment manager aims to achieve, using the investment policy as guidance.

The total market value of the fund/portfolio.

The strategies of selecting investment instruments outside of a country as part of an investment strategy.

When some or all of a fund/portfolio’ returns are paid to its investors. The distributions are valued in cents per unit and can either be cashed in or left in the investment.

A bond that provides protection against inflation. The interest payable and the principal amount payable at maturity of the bond is linked to inflation.

The rate of change in the price of goods and services from one year to the next. It also approximates the decrease in the purchasing power of money. Two commonly used indicators of inflation rates are the Consumer Price index (CPI) and the Producer Price index (PPI).

The process of investing money for profit or material result.

An organisation that makes investments in portfolios of securities on behalf of clients under the investment objectives and parameters the fund/portfolio mandate has defined.

International securities identification number. Identifies specific securities worldwide.

The Johannesburg Stock Exchange. The primary role of the JSE is to provide a market where securities can be freely traded under regulated procedures.

The JSE's unique identifier for all the listed funds.

The cost of the fund share on the day it launched.

An independent investment administration company that offers investors access to unit trusts and investment products across a number of different management companies. A Lisp is an administrator and does not manage funds/portfolios nor does it provide investment advice.

An asset/investment that can be converted into cash quickly with minimal effect to the price you receive in the open market.

The degree to which an asset/investment or security can be quickly bought or sold in the market without affecting its price.

Risks associated with large-scale or general economic factors, such as interest rates and national productivity.

The company that launches a CIS and maintains overall responsibility for administration, appointing investment managers and trustees. While some of these functions might be outsourced, it is the CIS manager that holds the accountability.

An adjustment we make to the contract value if you withdraw some or all your money before the end of the planned investment period. Companies use MVAs to try to make sure that investors who cash in some or all of their investment profits early don’t disadvantage the remaining investors.

Risks are deemed material when a reasonable person would find that information important when making investment decisions.

Provides you with an investment that earns a low interest due to low risk and can be converted to cash quickly.

A free float-adjusted market capitalisation weighted index that is designed to measure the equity market return from developed markets. This index consists of the following 24 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States.

A combination of asset classes (such as cash, shares or bonds) used as an investment. A multi-asset-class investment would contain more than one asset class, thus creating a group of investments.

Value of fund divided by portfolio minus liabilities. The number of units in issue. A unit trust fund is divided into identical participatory interests (units), each with the same value. These units have a fixed price which is established daily. Money Market funds/portfolios are priced differently to other funds/portfolios. This fund/portfolio is not priced at market value but rather at a fixed price rate of R1.00 per unit.

A fee you pay if the fund/portfolio performs better than an agreed- upon benchmark or rate over a certain period.

The risk faced by investors, corporations and governments that political decisions, events or conditions will significantly affect the expected value of a business or investment due to a given economic action.

See ‘fund’.

The person responsible for implementing a fund/portfolio’s investing strategy and mandate, and managing its trading activities.

A share that entitles you to a fixed dividend and whose payment takes priority over that of ordinary shares.

Calculated by dividing the price per share by the earnings per share. This ratio provides a better indication of the value of a share, than the market price alone. For example, all things being equal, a R10 share with a P/E of 75 is much more ‘expensive’ than a R100 share with a P/E of 20.

Indicates the changes in production prices of locally produced commodities and imported commodities. The PPI is compiled from a survey of the prices paid by samples of manufacturers, exporters and importers operating in the South African economy.

The shares of property companies.

The growth of an investment by more than inflation.

The interest rate at which commercial banks can borrow money from the South African Reserve Bank.

Growth of an investment, for example from interest earned, dividends received or capital gains.

The likelihood of losing money when you invest.

A ratio used to compare the expected growth of an investment in relation to the amount of risk taken to get that growth. Generally, the higher the risk the bigger the potential reward.

A certain number of consecutive periods. For example, a three-month rolling period starting on 15 February and ends on 15 May.

Financial assets you can trade (for example share or a bond).

The profits or losses of a business in terms of a ratio.

Standard deviation measures the volatility of fund/portfolio returns.

A fee paid to protect the investment against losses in the fund.

The short- term composite fixed- interest index that measures the return for short- term fixed-interest or money market instruments.

The risk where transactions or business relationships may have unforeseen adverse tax consequences.

Expenses relating to the administration of the fund/portfolio expressed as a percentage of the net asset value (NAV). These include:

• Annual service fee
• Fund/portfolio's bank charges
• Fund/portfolio’s audit fees
• Taxes (for example stamp duty, Vat)
• Custodian and trustee fees (custodians and trustees are appointed to protect the interests of the unitholders, and the fees pay for their services)
• Costs related to securities lending
• Performance fees

Expenses relating to the buying and selling of the funds/portfolios’ underlying investments expressed as a percentage of the net asset value (NAV). These include:

• VAT
• Brokerage
• Securities transfer tax (STT)
• Investor protection levy
• Strate contract fees
• Exchange rate costs
• Bond spread costs
• Fees associated with contract for difference (CFDs)

The sum of the TER and the TC. Shown as a percentage depicting the annual costs relating to the investment.

A measure of the gain or loss expressed as a percentage of the invested capital.

The FTSE/JSE All Bond Index is a composite index containing the largest-20 vanilla bonds ranked dually by liquidity and market capitalisation. It is a summary measure of the movement in the bond market.

The FTSE/JSE All Share Index represents the largest-99% of eligible companies listed on the JSE. It is a useful measure of the movement in the equity market.

To adjust or calculate to reflect a rate that is based on any full year.

The Association for Savings and Investment South Africa.

Asisa categorises unit trusts into different sectors for rankings or comparisons.

• Asset : A useful or valuable thing, person, or quality.
• Asset class : A type of investment (such as stocks, bonds, or real estate) regarded as a discrete category, especially in the context of asset allocation.
• Investment : The process of investing money for profit or material result.

The local currency of the country the company is operating in. This is also the first currency listed in a JSE currency quote.

A standard against which the growth of a fund/portfolio can be measured.

A business news agency that provides information like news, data, research.

Debt investments in which you lend money to an entity (typically a corporate company or government) for a defined period of time at a variable or fixed interest rate.

Cash or cash equivalent usually refers to a savings or fixed-deposit account with a bank, or to a money market investment. It is generally regarded as a safe investment.

Collective investment schemes or CIS enables you to pool your money with other investors who have similar investment objectives. You buy and sell units of the scheme.

The South African CPI shows the change in prices of a standard package of goods and services which South African households purchase for consumption.

The currency in which a fund/portfolio is invested.