Here is a simple reference guide to some of the technical terms that you may come across as you explore your investment options.
Absolute return funds
Absolute return strategy
An active fund has a manager at the helm (and usually a team of analysts and researchers) who will select the assets he or she believes will increase in value. Actively-managed funds have the capacity to outperform their peers and the market as a whole. They are usually slightly more expensive than passive funds because investors must pay for the manager’s expertise.
Annual Management Charge (AMC)
Assets under management (AUM)
Bank of England
Bank of England base rate
Below investment grade bonds
Cash and cash equivalents
Cash flow statement
Collective investment fund
Contract for differences (CFD)
Consumer Price Index (CPI)
Credit rating agency
A measure of a bond’s sensitivity to changes in interest rates. The longer the duration, the more sensitive it is.
Earnings per share (EPS)
Often referred to as an initial charge, this is the charge that may be taken from your investment before the deal is placed in your chosen fund.
Columbia Threadneedle Investments does not currently apply any entry charges on its UK domiciled fund ranges, but if you buy our funds through certain distributors they may apply an entry charge.
Exchange-traded fund (ETF)
This is the charge that may be taken from the proceeds of your investment when you choose to sell your investment. Columbia Threadneedle Investments does not apply an Exit Charge.
Final salary pension
Financial Conduct Authority (FCA)
Financial Services Compensation Scheme (FSCS)
Fixed-term savings accounts
Fund of funds
Guaranteed income bonds
High yield bonds
Individual Savings Account (ISA)
Initial public offering (IPO)
Investment grade bonds
Key Investor Information Document (KIID)
Money market instruments
Net asset value (NAV)
Net and gross exposure
Ongoing Charges Figure (OCF)
The cost of management of a fund represented as a percentage. It is usually based on the last year’s expenses and may vary from year to year. It includes charges such as the fund’s annual management charge, registration fee, custody fees and distribution cost but excludes the costs of buying or selling assets for the fund (unless these assets are shares of another fund).
In some cases, the ongoing charges figure may be based on an estimate of future charges, either because the share/unit class is relatively new and has an insufficient track record to be calculated exactly, or if historic figures are unlikely to accurately reflect future ongoing costs. The fund’s annual report for each financial year will include details of the exact charges applied. An OCF shown with an asterisk (*) indicates an estimated figure.
For a more detailed breakdown please visit www.columbiathreadneedle.com/fees.