A fund may have accumulation and income shares. If an investor selects this share type, any income generated by the fund is automatically reinvested. The amount of the reinvested income is reflected in the increased price of each accumulation share.
These are types of non-traditional investments – in other words, something other than shares, bonds or property. The term can cover anything from commodities (such as gold) to infrastructure investments (for example, companies involved in financing, building or maintaining motorways or hospitals). Alternative assets can be useful to help with diversification, as some of these investments are not expected to perform in the same way as more traditional investments.
The fee paid to Premier Miton for the different costs associated with managing your investment each year and is expressed as a percentage of your investment. The AMC does not typically change from year to year.
A bond collateralized by a pool of assets such as mortgages or consumer loans.
Different groups of investments such as company shares, bonds, commodities or commercial property.
A term that (is used to describe a fall in a financial market or asset of 20% or more.
A significant rise in a financial market or group of assets over a period of time. Sometimes it is defined as a rise of 20%.
A closed-ended fund is a portfolio of pooled assets that raises a fixed amount of capital through an initial public offering (IPO) and then lists shares for trade on a stock exchange. Other names for a closed-ended fund include “closed-end investment” and “closed-end mutual fund
Investing in a number of different investments, which can include different assets, funds and geographic areas, to help spread investment risk.
Bonds issued by less developed countries and corporations within those countries.
An exchange-traded fund is a type of security that involves a collection of securities, such as stocks, that often track an underlying index, although they can invest in any number of industry sectors or use various strategies.
A frontier market is a country that is more established than the least developed countries (LDCs) but still less established than the emerging markets because it is too small, carries too much inherent risk, or is too illiquid to be considered an emerging market. Frontier markets are also known as “pre-emerging markets
Futures are financial contracts that obligate the parties to transact an asset at a predetermined future date and price. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date.
The level of a company’s debt in relation to its capital. A company with significantly more debt than capital is considered to be highly geared.
The funds in this sector are expected to have a range of different investments. However, the fund manager has significant flexibility over what to invest in. There is no minimum or maximum requirement for investment in company shares (equities) and there is scope for funds to have a high proportion of shares. The manager is accorded a significant degree of discretion over asset allocation and is allowed to invest up to 100% in equities at their discretion.
Funds in this sector are expected to have a range of different investments. The fund must have between 20% and 60% invested in company shares (equities). At least 30% of the fund must be in fixed income investments (for example, corporate and Government bonds) and/or “cash” investments. “Cash” can include investments such as current account cash, short-term fixed income investments and certificates of deposit.
A bond which has a higher credit rating than ‘high yield’ bonds. They are considered to have a lower risk of default and therefore pay a lower yield.
Where a company borrows money to invest in its business or assets in the expectation that the profit made will be greater than cost of the borrowings.
Liquidity refers to how easily an asset can be bought or sold in the market without affecting its price – it can also be known as market liquidity. When there is a high demand for an asset, there is high liquidity, as it will be easier to find a buyer (or seller) for that asset
The total value of the shares of a company, often referred to as ‘market cap’. For example, large companies are referred to as “large cap”.
A measure of what it costs to invest in a fund over a year. It includes the fee paid to Premier Miton for the management of the fund (known as the annual management charge), with the remainder covering costs that have to be paid to external companies for other services relating to the ongoing administration and management of a fund, such as the fees paid to the depositary, custodian, regulator, auditor and administrator. The fee is deducted from the value of the fund and reflected in the fund’s share price. The OCF is typically published once a year and can change from year to year.
An open-end fund is a diversified portfolio of pooled investor money that can issue an unlimited number of shares. These shares are priced daily based on their current net asset value (NAV). Some mutual funds, hedge funds, and exchange-traded funds (ETFs) are types of open-end funds
A private equity trust is an alternative investment and consists of companies that are not listed on a public exchange.
A type of derivative. Put-options can be used for a number of reasons. For example, they can be used to protect the value of an underlying investment or group of investments against a fall in value. They can be thought of as an insurance policy. These can make a fund or trust more volatile from time to time.
When a company offers its existing shareholders the chance to buy additional shares for a reduced price. Usually the discounted price will stand for a specified time frame, after which it is returned to normal.
These investments are built around a derivative and have specific criteria that need to be met to deliver a positive return.
Bonds with a credit rating below investment grade bonds (these have a lower risk of default and therefore pay a lower yield) as judged by the bond ratings assigned by one of the major rating agencies.
The Sterling Overnight Index Average, abbreviated SONIA, is the effective overnight interest rate paid by banks for unsecured transactions in the British sterling market. It is used for overnight funding for trades that occur in off-hours and represents the depth of overnight business in the marketplace.
A term used to describe a privately owned start-up company that is not traded on a stock exchange and, due to its success, has a valuation of $1 billion or more. They are referred to as unicorns as historically these types of company have been rare, but are more common today.
©Premier Miton Investors. 2022. Issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227. Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.
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