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Securities:
An asset which has financial value, and can be traded. Securities are categorised into debt securities (such as banknotes, bonds and debentures) and equity securities, eg stocks; and derivative contracts, such as forwards, futures, options and swaps. The company or other entity issuing the security is called the issuer. Regulatory structures determine what qualifies as a security within each jurisdiction.
Shares:
A share of stock (also referred to as equity shares) represents a share of ownership in a corporation. The price of a stock is directly proportional to the demand. However, there are many factors on the basis of which the demand for a particular stock may increase or decrease. Stock price is also changed based on the forecast for the company and whether their profits are expected to increase or decrease.
Share class:
A way of describing a specific type of security such as stock or shares. Companies that have more than one class of stock usually give them alphabetical markers, such as "Class A" shares and "Class B" shares.
Many investment funds also have more than one share class. Different classes will have different attributes such as how income is treated, fee levels, minimum investment requirements or restricted availability etc. For example:
- Share Class 1: available to all investors with a 1% fee and a £1000 minimum investment, or
- Share Class 2: available only to institutions with a 0.5% fee and a £500,000 minimum investment.
Some Fund Managers allow investors to move between share classes without selling and buying their holdings in the fund.
Share gifting:
When a donor gifts shares to a charity as a charitable donation or having left them in their Will.
Short (or leveraged) Exchange-traded Funds (ETFs):
A type of ETF that attempts to achieve returns more sensitive to the movements of an index. These are usually classified as complex investments.
Single investment type:
These provide exposure to different management styles, market segments and geographical regions within a single asset class. The aim is to increase overall diversification within that asset class.
Socially Responsible Investment (SRI):
Investing in line with the charity's goals or mission. Read our article
Is it time for your charity to invest ethically?
Spread:
The difference in price or yield between two assets. A credit spread is the difference in yield between a corporate bond and the corresponding government bonds of differing maturity. A price spread is the difference between the quoted bid and offer prices for a single security.
Stocks or stock instrument:
Stock is a general term used to mean equity investment.
Stock selection:
The process by which fund or portfolio managers use their own judgement to complement numerical analysis and select those company shares that are most appropriate to their client's objectives.
Structured products:
A fixed-term investment where the return you get depends on the performance of something else, such as the stock market or other investments on which it is based.
Sub-investment grade bond:
A bond whose issuers have been given a credit rating of less than BBB by rating agencies and are more at risk of becoming insolvent.
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