CalculatorChevron downCloseLoginMenu

Jargon buster

Investment speak made easy

At Standard Life Self Investor we try to minimise the jargon, but to help you understand some of the more common terms found in financial services - we have developed a jargon buster for you.


Active funds

A fund that is actively managed by a fund manager. The fund manager will try to outperform a pre-determined benchmark such as a market index, cash/inflation or the average return of other similar funds.

Accumulation units

The investments held by a fund will usually generate an income in the form of dividends, interest etc. Accumulation units do not pay out this income and instead reinvest this within the fund.

AER (Annual Equivalent Rate)

This is the rate of interest you receive on cash balances in your Stocks and Shares ISA or Trading Account and is shown as an annual percentage, e.g. 1% AER.


An asset is something that you invest in such as equities (shares), bonds and property. Investment funds are made up of a large number of individual assets.

Asset allocation

Where the fund holds more than one asset class the split between the asset classes is known as the fund's asset allocation.

Asset class

This is a category of investments, such as equities, bonds and property. Normally assets in the same category have similar characteristics, but they can have very different returns and risks.



This gives you a point of reference for evaluating a fund's performance. It’s usually a market index, cash/inflation or the average return of other similar funds. This information can be found in the Fund factsheet and Key Investor Information Document (KIID).

Bid price

The price at which you can sell units or shares.

Bid offer spread

Some funds quote two dealing prices, an offer price and bid price. The offer price is the price at which you can buy units or shares and the bid price is the price at which you can sell units or shares. The difference between these prices is known as the bid offer spread.

Blended funds

Blended funds available to Standard Life Self Investor customers combine active and passive investment styles and a broad range of sectors and markets.


Bonds are a type of loan which typically pay a fixed amount of interest (known as a coupon) over a set period of time. Bonds issued by companies are known as corporate bonds, while bonds issued by governments are known as government bonds (or gilts in the UK).


Capital Gains Tax

Often abbreviated as CGT, this is the tax on any gain or profit you make when buying and selling investments.


Cash can refer to readily accessible money personally held within a savings or current account.

Cash asset

Funds may invest in cash and near cash assets which might include Certificates of Deposit, Loan Notes and Treasuries.

Cash Account

A cash account is automatically opened when you open a Stock and Shares ISA or a Trading Account with us. You can use it to hold money until you're ready to invest in one of these products, or to move money from your Trading Account into your Stocks and Shares ISA.

Cash ISA

A savings account which allows you to save without paying income tax on the interest you receive.

Closed ended funds

An investment fund, such as an investment trust, that has a fixed number of shares in issue - unlike open ended funds, closed ended funds don’t create or issue units or shares to meet demand from investors. That means the price is influenced by investor demand. Standard Life Self Investor doesn’t offer these funds.

Collective investment

A generic term for investment funds, such as unit trusts and OEICs, which are run by professional managers. They allow investors to pool their money with that of other investors and give them the opportunity for exposure to a wider range of investments than if they invested directly themselves. This potential for greater diversification means they can also help spread risk.


A commodity is a physical material. There are both 'hard' commodities such as gold, silver or copper, and 'soft' commodities such as coffee and cereals. The price of a commodity is subject to supply and demand.

Corporate bonds

Corporate bonds are issued by companies to raise money. They’re similar to government bonds but often carry more risk.


The interest payment from a bond.



Whilst there are no guarantees, this means spreading risk by investing across different asset classes so that potential losses in one asset class may be partially or fully offset by potential gains in another. For example, you could diversify your investments across equities (shares), bonds or property.


A dividend represents a share of the profits that a shareholder receives in return for investing in a company's shares. These payouts are typically made in cash - called cash dividends - and are normally paid twice a year.



This asset class is also known as stocks or shares. This is where you buy a stake in a company and the value of this stake will be influenced by a number of factors such as the profits that the company makes, how the company is perceived to be performing and whether the company may increase in value in the future.


Fixed interest

This asset class refers to investments, usually bonds, which pay out a fixed amount or fixed rate of interest.

FTSE® 100 Index

This is an index made up of the 100 largest companies listed on the London Stock Exchange (LSE).

Fund / Investment fund

An investment fund is a form of collective investment, run by a fund manager. The money you invest is combined with the money from other investors and used to buy a range of assets, such as equities (shares), bonds and property.

Fund of funds

An investment fund which invests in other funds, also known as a multi-manager fund.

Fund manager

A fund manager's job is to make the decisions that will help a fund to meet its aims and objectives. That means they will be responsible for both the day-to-day decisions about the fund, such as responding to what’s happening in markets, and the long-term decisions, such as how and where the fund invests. This is one of the services you pay for through fund charges.



These are bonds issued by the UK government, usually paying a fixed interest rate for a predetermined length of time. They got their name because of the fact that gilts were originally issued on gilt edged paper.

Gross interest

This is the interest payable on cash savings before income tax is deducted.

Growth fund

A fund that aims to increase in value over time.


Income fund

A fund that aims to deliver a reasonable level of income by selecting shares which pay higher dividends. It may also invest in bonds or a combination of both.

Income units

Most investment funds offer both income units and accumulation units. With income units, any income generated by the fund is distributed to the fund’s investors on specific dates (often monthly or quarterly).


An index measures the change in value of a group of stocks or other types of assets, including bonds, property and commodities, which together represent an entire market or market sector. Examples include the FTSE® 100 Index, which reflects the changing value of the UK's biggest 100 companies and the S&P 500 Index, which measures the change in value of 500 of the largest companies listed on US stock markets.


Inflation is a measure of the increasing cost of living. The two main factors that cause inflation are increased demand for goods and services, and rising costs for companies supplying those goods and services. The impact of inflation is that in the future your money may not have the same buying power as it does currently.

Investment trust

Investment trusts are collective investments which are structured as public limited companies, listed on the London Stock Exchange and have a fixed number of shares. Unlike unit trusts or OEICs, the share price fluctuates with the level of demand for these shares rather than being directly linked to the value of the assets held by the fund.


Key Investor Information Document (KIID)

This document sets out the essential information and key facts about individual funds. The aim is to enable you to make comparisons between different funds and allow you to make informed decisions when choosing investments.


Multi asset

Multi asset funds invest in a broad range of assets and markets. Typically this includes equities (shares), bonds, property and money market instruments - both in the UK and globally.

Money market instruments

These include deposits with banks and building societies, as well as loan notes and treasuries issued by governments and large corporations.


Net interest

This is the interest payable on cash savings after income tax is deducted.


OEIC (Open-ended- investment -company)

This is a collective investment which is structured as a company and therefore operates under corporate law. From an investor’s perspective, it’s very similar to a unit trust, except that a unit trust operates under trust law. The number of shares can vary on a daily basis depending on supply and demand for the assets held by the OEIC. The share price will be directly linked to the value of the underlying investments within the OEIC.

Open ended fund

Most collective investments, including unit trusts and OEICs, are open ended funds. This means the number of units or shares can be varied on a daily basis depending on supply and demand. The unit or share price will be directly linked to the value of the underlying investments within the fund.


Passive funds

Unlike active funds, which aim to outperform a benchmark, passive funds aim to track or mirror the overall performance of a particular benchmark (usually a market index or blend of market indices). Examples include funds that track the FTSE® 100 Index, which represents the UK's biggest 100 companies, or the FTSE® All Share Index, which reflects the performance of the UK stock market as a whole.


This includes direct investments in commercial property such as office, retail, leisure and industrial developments, as well as indirect investments such as shares in property companies.


Return - A return is what you earn on an investment over a certain time period. Returns can be both positive and negative.


Shares (equities)

These represent part ownership of a company listed on a stock exchange. Share prices can go up and down as a result of various factors, including supply and demand, a company’s performance and the economic environment. You also buy shares in open ended investment companies (OEICs).

Single asset

Single asset funds will invest in a single asset class, such as equities, bonds, property or money market instruments either in a single country or region or across a range of countries or regions.

Single priced fund

A fund where the price for buying and selling units or shares is the same.

Stocks and Shares ISA

A Stocks and Shares ISA allows you to invest in many types of investments and investment funds, with no liability to income tax or Capital Gains Tax on any returns you might receive.


Tax advantages / treatments

The key purpose of putting your money in an ISA is that it offers a number of tax advantages. You don't have to declare your ISA investments to HM Revenue &Customs (HMRC) and any gains you make are exempt from Capital Gains Tax. You'll also pay no income tax on any returns you receive from your ISA - which is why you'll often hear ISAs described as being 'tax efficient'.

Trading Account

Also known as a General investment Account, a Trading Account allows you to invest in our range of funds. Unlike a Stocks and Shares ISA there is no annual limit to the amount you can invest. However, a Trading Account does not offer any tax benefits.


Underlying assets

This refers to the assets which a fund is invested in.


A collective investment, such as a unit trust, is divided into equal parts called units. These units are then bought and sold by investors. To determine the value of each investor’s holding, the number of units held is multiplied by the unit price.

Unit price

This is the price of a single unit in a unit trust.

Unit trust

A unit trust is a form of collective investment and is set up under the investment guidelines which pools investors' money to invest in different companies. This is a collective investment which operates under trust law. From an investor’s perspective, it’s very similar to an OEIC, except that an OEIC operates under corporate law, as it’s set up as a company. The number of units can be varied on a daily basis depending on supply and demand. The unit price will be directly linked to the value of the underlying investments within the unit trust.



Sometimes also known as a tax wrapper, this is an account or product that allows investors to bring together their investments in one place.. Examples include Stocks and Shares ISAs, General Investment Accounts, such as our Trading Account, and pensions.