Investment dictionary | Learn & invest

A - B

Account balance

The amount of money a user has stored in a financial repository.

Accounting standards

The rules a company follows when preparing financial statements.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

After-hours trading

Trading outside of a stock exchange's opening hours.

Alpha

The percentage by which an investor outperforms a relevant benchmark.

American Depository Receipt (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.

Annualised Rate of Return

The average annual return an investor sees over a set period of time.

Arithmetic Mean

The sum of a set of numbers added together and then divided by the total amount of numbers in that set.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

Base rate

What's the base rate?

Bed & ISA

Understand what Bed and ISA is and how it works

Beta

Learn what Beta stands for in finance.

Bond

Learn what a bond is

Bull market

We explain what a 'bull market' means

Capital

Learn what financial capital means

Clean price

The quoted price of a gilt, which excludes accrued interest

Collective investment scheme

Learn what's a collective investment scheme

Compound interest

Understand what compound interest means and how it's calculated

Conventional gilts

Gilts where the dividends and principal repayments are fixed in nominal terms. This is as opposed to an index-linked gilt where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI).

Costs and Charges

The money you pay when investing.

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Custodian bank

Learn what a custodian bank is.

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Depository

We look at what is a depository and what role they play in keeping markets work.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

Diversification

An investment strategy in which money is put into a variety assets.

Dividends

Find out what dividends are and how they can contribute to the growth of your investment portfolio.

ESG investing

ESG is a hot topic right now for investors. Understand what ESG investing is all about and how you can use it to diversify your portfolio.

Earnings per share

We look at what earnings per share mean and how to calculate it

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.

Equity ETF

An exchange-traded fund that is comprised of a set of stocks.

Exchange-Traded Fund (ETF)

A collection of investments, pooled into a single fund that can be bought and sold on a stock exchange.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

Free Trade

The other free trade. International trade in which countries allow goods to flow across their borders without imposing import or export taxes.

Fundamentals

The data or information that is likely to impact a company's stock price.

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

Gilt

What is a gilt?

Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.

Gross Margin

The difference between a company's revenue and the cost to produce its goods/services, divided by revenue.

Growth stocks

These are stocks in companies that are considered to be “growing”. These companies may be delivering new products and services, or entering new markets.

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

Hypothesis Testing

A mathematical test used to determine whether a claim is true or false.

Income statement

A summary of a company's income and expenses over a set period of time.

Inflation

The increase in the prices of goods and services over time, and the process by which money loses its value.

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

Internal Rate of Return (IRR)

A means of calculating the potential future return on an investment.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

Investment Trust

A company that pools money together from multiple investors and then invests it.

Junk Bond

A form of debt investment that carries higher risk because of the likelihood that the issuer will default.

index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.

Forward pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

Margin call

Learn what a margin call stands for in financial terms.

Maturity value

What's the maturity value of a bond?

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.

Money weighted rate of return

Learn what Money Weighted Rate of Return or MWRR stands for in finance.

NASDAQ

A US stock exchange specialising in the shares of technology companies.

NYSE

The world's largest stock exchange. Wall St HQ.

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.

Net Income (NI)

The money a firm is left with from sales after subtracting taxes and different business costs.

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.

Oligopoly

A situation in which a market or industry is controlled by a small group of companies.

Over-The-Counter (OTC)

A security that is sold outside of an exchange.

Packaged Retail and Insurance-based Investment Product (PRIIP)

An investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations.

Ponzi Scheme

A form of fraud designed to lure new investors, and pays the earlier backers by using the new investors' money.

Professional Client

An investor that is able to meet several regulatory criteria.

Profit and Loss Statement (P&L)

A statement that summarises firm's expenses, costs, and revenues incurred during a time period. AKA income statement.

S&P 500

Find out what is the definition of the S&P 500 index.

SPAC

Find our what a SPAc or special purpose acquisition company is.

Securities

Bonds and stocks.

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.

Stock Market

A place where shares of publicly listed companies are traded.

Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.

Technical Analysis

Examining price movements of shares and other assets, and trying to predict how they will move in the future.

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.

Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

Total Return

This is the measurement of a fund’s performance in a specific period.

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.

United States Dollar (USD)

The famous greenback our friends in the US use as currency.

Value Investing

The art of buying shares which trade below their value, according to the analysis of the value investor.

Value stocks

Stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable.

Venture Capital

A type of financing that investors provide to startups, who sometimes announce getting said financing in TechCrunch, to big fanfare.

Venture Capital Trust (VCT)

A listed company run by a fund manager, investing mainly in private companies.e.

Volatility

A measure of how much the prices of an asset or index vary over time.

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Stocks and shares ISA

Benefits include

Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more
FX fee of 0.59% on non-GBP trades
3% AER on up to £2k uninvested cash (changing to 2.5% on up to £2k from 1 January 2026)
Mutual funds
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Accounts include

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Mutual funds
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Basic

£0.00

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Accounts include

General investment account
Stocks and shares ISA
New

Benefits include

Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more
FX fee of 0.99% on non-GBP trades
1% AER on up to £1k uninvested cash

Standard

£5.99

/Mo.

billed monthly

Get Standard

Accounts include

General investment account
Stocks and shares ISA

Benefits include

Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more
FX fee of 0.59% on non-GBP trades
3% AER on up to £2k uninvested cash (changing to 2.5% on up to £2k from 1 January 2026)
Mutual funds
New

Plus

£11.99

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billed monthly

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Accounts include

General investment account
Stocks and shares ISA
Personal pension (SIPP)

Benefits include

Commission-free investing in 6,500+ UK, US, and European stocks, ETFs, and more
FX fee of 0.39% on non-GBP trades
5% AER on up to £3k uninvested cash (changing to 3.5% on up to £3k from 1 January 2026)
Mutual funds
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Dictionary

#

52-week high/low

A - B

Account balance

Accounting standards

Accrued interest

After-hours trading

Alpha

American Depository Receipt (ADRs)

Annualised Rate of Return

Arithmetic Mean

Balance sheet

Base rate

Bed & ISA

Beta

Bond

Bull market

C - D

Capital

Clean price

Collective investment scheme

Compound interest

Conventional gilts

Costs and Charges

Coupon

Custodian bank

DMO

Depository

Dirty price

Diversification

Dividends

E - F

ESG investing

Earnings per share

Equity

Equity ETF

Exchange-Traded Fund (ETF)

Fixed Income

Free Trade

Fundamentals

G - H

Geometric Mean Return

Gilt

Global Investment Performance Standards (GIPS)

Gross Margin

Growth stocks

Hedge Fund

Holding Period Return

Hypothesis Testing

I - J

Income statement

Inflation

Interest Rate

Internal Rate of Return (IRR)

Investment Return

Investment Trust

Junk Bond

index-linked gilts

K - L

Key Information Document (KID)

Know Your Customer (KYC)

LSE

Leverage

Limit order

M - N

Forward pricing

Margin call

Maturity value

Money laundering

Money weighted rate of return

NASDAQ

NYSE

Net Asset Value (NAV)

Net Income (NI)

Net asset value

Nominal amount

O - P

OEIC

Oligopoly