What is 'Internal Rate of Return (IRR)'?

More terms

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.

Volatility

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

Unicorn

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

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

Net asset value

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

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.

Costs and Charges

The money you pay when investing.

Investment Trust

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

Total Return

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

Internal Rate of Return (IRR)