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Investment Glossary |
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Capital Gain
If you sell an Investment for more than you have paid for it,
the profit you make is called a capital gain.
Collective Investment - These are Investments such as unit trusts and investment
trust schemes where money is pooled from lots of people investing their contributions. <back>
Fund Manager
Someone who invests money and manages a portfolio of investments
such as unit trusts and investment trusts. <back>
Independent Financial Adviser (IFA)
IFAs are advisers who are independent
and are not limited to advising on the products of a particular company. <back>
Investment Trust
This is a company that invests in the shares of other companies.
Investment trusts are different from unit trusts. If you invest in an investment
trust, you are buying shares in the investment trust itself. <back>
Stock Market
Where stocks and shares are bought and sold. <back>
Unit Linked
Your contributions buy units in the selected fund. The value
of the units depends on the underlying assets in the fund. Consequently the
value of your fund can go down or up. There is a wide range of funds to choose
from: some are relatively low risk and others can be very speculative. <back>
Unit Trust
A fund which pools investors' money, making it easier for
them to buy into a wider range of investments and reduce the costs of investing.
If you invest in a unit trust your money is used to buy units, thus the more
people that invest in the unit trust, the bigger the trust gets. <back>
With Profit
At the end of each year the company declares the reversionary
bonuses (also known as 'regular' or 'annual'). These bonuses
are added
to the value of the fund and once added, cannot be taken away - although
the product provider will usually reserve the right to apply a
'Market Value Adjuster'. Reversionary bonuses are guaranteed to
be paid in full on the contractual maturity date. A Market Value
Adjuster (also known as 'Market Level Adjuster' or 'Market Value
Reduction') is a type of penalty applied on early encashment. It
is usually applied when the stock market is falling or fluctuating
rapidly. The idea is to ensure the surrender value received is
not unrealistic when compared with the underlying assets of the
fund. A further bonus may be paid on the contractual maturity date
or on a death claim. This is called the 'terminal' or 'final' bonus.
A factsheet (pdf
file, 105kb) on with profit policies can be found on the FSA
Consumer Help website. <back>
Hedgelands Financial Services Ltd, Hedgelands, Abbotskerswell, Newton
Abbot, TQ12 5PW
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Telephone
0845
165 1280
General Insurance
0845 165 1281
Fax
01626 332622
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