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Glossary

Some of the commonly used terms in the industry are explained here.

Appreciation

When an investment increases in value, it appreciates. For example, an equity share whose price goes from 100 cents to 120 cents has appreciated by 20 cents.

Asset


Anything that has value and can be traded, such as property, resources, cash and investments. Examples include equities, bonds, real estate, bank accounts and jewellery.

Asset Allocation

When you divide your money among various types of investments, such as equities, bonds, and short-term investments (also known as "instruments"), you are allocating your assets. The way in which your money is spread is called your asset allocation.

Asset Allocation Fund


A fund that spreads its portfolio among a wide variety of investments, including domestic and foreign equities and bonds, government securities, gold bullion and real estate stocks. This gives small investors far more diversification than they could get allocating money on their own. Some of these funds keep the proportions allocated between different sectors relatively constant, while others alter the mix as market conditions change.

Automatic Reinvestment

In some Collective Investment Schemes the income, dividends and capital gain distributions are automatically invested into the fund by buying additional shares and thus the investor may build up their holding.

Annualised Return

This is the hypothetical rate of return, where if the fund achieved it over a year's time, would produce the same cumulative total return if the fund performed consistently over the entire period. A total return is expressed in a percentage and tells you how much money you have earned or lost on an investment over time, assuming that all dividends and capital gains are reinvested.

Balance Sheet


A financial statement showing the nature and amount of a company's assets, liabilities and shareholders' equity.

Balanced Fund 

A Collective Investment Scheme that maintains a balanced portfolio that provides significant diversification through asset allocation.

Bid Redemption or Sell Price

The price at which a Collective Investment Schemes units/shares are redeemed (bought back) by the fund. It refers to the current net asset value per share, less any redemption fee or back-end load.

Board of Directors

A committee elected by the shareholders of a company, empowered to act on their behalf in the management of company affairs. Directors are normally elected each year at the annual general meeting.

Bond/Income Fund

A Collective Investment Scheme whose portfolio consists primarily of corporate and government fixed interest securities. These funds generally emphasise income rather than growth.

Bond Rating

System of evaluating the probability of whether a bond issuer will default. Ratings range from AAA (extremely unlikely to default) to D (likely to default). Collective Investment Schemes generally restrict their bond purchases to issues of certain quality ratings, which are specified in their prospectus.

Capital

This is the amount of money you have invested. When your investing objective is capital preservation, your priority is trying not to lose any money. When your investing objective is capital growth, your priority is trying to make your initial investment grow in value.

Capital Appreciation Fund

A mutual fund that seeks maximum capital appreciation through the use of investment techniques that involve greater than ordinary risk, such as borrowing money in order to provide leverage and high portfolio turnover.

Capital Gain

Profit from a sale of an investment constitutes a capital gain. For example, if you bought a share of a company for 100 cents and later sold it for 120 cents, you would have a capital gain of 20 cents.

Capital Gains Distributions

Periodic payments to Collective Investment Scheme investors that are comprised of gains realized on the sale of portfolio securities.

Capital Growth

A rise in the market value of a Collective Investment Schemes securities, reflected in its NAV per share/unit. This is a specific long-term objective of many mutual funds.

Certificate of Deposit

Interest-bearing, short-term debt instrument mainly issued by financial institutions.

Closed-ended Mutual Fund

A Collective Investment Scheme that offers a limited number of shares. They are traded in the securities markets. Price is determined by supply and demand. Unlike open-ended mutual funds, closed-ended funds do not redeem their shares.

Collateral Security

This is extra security provided by a borrower to back up his/her intention to repay a loan.

Commercial Paper

Short-term, unsecured promissory notes with maturities that are shorter than 3 months. They are issued by corporations to fund short-term credit needs.

Commission

The broker or agent's fee for buying or selling securities on behalf of a client. The fee is usually based on a percentage of the transaction's market value.

Compounding

When you make an investment it will often make a profit. When this profit is invested it may also begin to earn additional profits, which results in compound profits. Compounding would occur if income or dividend payments are reinvested

Consideration

The 'consideration' is the total purchase or sale amount associated with a transaction. The amount you 'pay' or 'receive'. It may also be the basis for working out the commission, taxes and any other charges you are asked to pay.

Custodian

The bank or trust company that maintains the Collective Investment Schemes assets, including its portfolio of securities or some record of them. It provides safekeeping of securities but has no role in portfolio management.

Deficit

The shortfall between government revenues and budgetary spending in any given year. A surplus occurs when annual revenues exceed expenditures.

Derivative

An investment contract based on an underlying investment called an "instrument." The most common type of derivative is an option contract, which involves the right to buy or sell the underlying instrument at an agreed price. Futures contracts are also derivatives.

Diversification

The policy of spreading investments among a range of different securities to reduce the risks inherent in investing.

Dividend


When companies pay part of their profits to shareholders, those profits are called dividends. The amount of each share's dividend often depends on how well the company performs.

Ex-Dividend Date

The date on which a fund's Net Asset Value (NAV) will fall by an amount equal to the dividend and/or capital gains distribution (although market movements may alter the fund's closing NAV somewhat). Most publications that list closing NAVs place an "X" after a fund's name on its Ex-Dividend Date.

Expense Ratio

The ratio of total expenses to net assets of the fund. Expenses may include management fees and other administrative expenses. Expense ratios may be a function of a fund's size rather than of its success in controlling expenses.

Face Value

The face value is the term used to describe the value of a bond in terms of what the company which issued the bond will actually repay when the loan matures. It is sometimes described as nominal or par value.

Financial Intermediary

Your financial consultant who gives professional advice on a fund's investments and who supervises your investment into a particular fund.

Fiscal Year

An accounting period consisting of 12 consecutive months that is determined by the government of a particular country.

Global Fund

A fund that invests in securities around the world.

Income Fund

A mutual fund that primarily seeks current income rather than growth of capital. It will tend to invest in stocks and bonds that normally pay high dividends and interest.

Inflation

When the price of goods and services rises, the result is called inflation. This means that things you buy today at one price are likely to cost more in the future.

Institutional Investor

An institutional investor is a professional money manager whose job it is to put money into shares and other assets on behalf of private investors who entrust them with money.

International Fund

A fund that invests in securities traded in markets outside the country in which it is registered.

Investment Advisor/Consultant

See Financial Intermediary.

Investment Objective

The financial goal that an investor or Collective Investment Scheme pursues (e.g. long-term growth, current income, etc.).

Issued Share Capital

This is the total number of shares a company has made publicly available multiplied by the total nominal value of the shares.

Junk Bond

A speculative bond with high credit risk.

Lessee

The person who makes lease payments. He has right of possession and use of a property under the terms of a lease.

Lessor

The person who receives lease payments. He leases property.

LIBOR


LIBOR stands for London Inter Bank Offer Rate. It is the rate of interest at which banks offer to lend money to one another in the so-called wholesale money markets in the City of London. Money can be borrowed overnight or for a period in excess of five years. The most often quoted rate is for three month money.

Liquidity

If you can generally buy or sell an asset quickly, or convert it to cash quickly, then that asset is considered "liquid."

Load

A sales charge or commission assessed by certain Collective Investment Schemes to cover their selling and initial administration costs.

Management Fee

The amount that an Asset Management Company charges for the management of the fund's portfolio.

Market

A public place where the buying and selling of all types of equities, bonds and other securities takes place. A stock exchange is a market.

Market Capatilisation

Market capitalisation, or market cap, is a measurement of corporate or economic size equal to the stock price times the number of shares that a company has made publicly available. As owning stock represents owning the company, including all its assets, capitalisation represents the public opinion of a company's net worth and is a determining factor in stock valuation.

Maturity

This is the length of time (term) before a debt instrument (such as a bond) is due to be repaid in full.

Money Market Fund

A Collective Investment Scheme that aims to pay money market interest rates. This is accomplished by investing in safe, highly liquid securities, including certificates of deposit, commercial paper and Government securities. Money funds make these high interest securities available to the average investor seeking immediate income and high investment safety.

Monthly Cost Averaging


The technique of investing a fixed sum at regular intervals regardless of security market movements. This reduces average unit/share costs to the investor, who acquires more units/shares in periods of lower securities prices and fewer units/shares in periods of high prices. In this way, investment risk is spread over time.

Monthly Investment Plan


Many Collective Investment Schemes offer investment programmes whereby investors can benefit by investing specific amounts periodically, for a continuous period. The Monthly Investment Plan allows the investors to invest a fixed amount of currency every month or quarter for purchasing additional units of the scheme at NAV based prices.

Net Asset Value


Also known as NAV, this is the unit price of one unit of a Collective Investment Scheme. NAV is usually calculated at the end of every business day. It is calculated by adding up the value of all the securities and cash in the Collective Investment Schemes portfolio (its assets), subtracting the fund's liabilities, and dividing that number by the number of units that the fund has issued. It does not include a sales charge. The NAV increases (or decreases) when the value of the Collective Investment Schemes holdings increase (or decrease).

Net Worth

A person's net worth is equal to the total value of all possessions, such as a house, stocks, bonds, and other securities, minus all outstanding debts, such as mortgage and revolving credit lines.

Offer Document

Please see "Prospectus".

Option

A device used to speculate or hedge in securities markets. Buying a "call" option gives an investor the right to buy 100 shares of a stock at a certain price within a specified time; buying a "put" option allows an investor to sell a stock under the same conditions.

Premium


A bond premium is the amount by which a bond sells above its par (face) value. For insurance, the premium is the amount you pay for your insurance policy.

Price/Earnings Ratio

This is the price of a stock divided by its earnings per share. This ratio gives an investor an idea of how much they are paying for a particular company's earning power. A trailing P/E refers to a ratio that is based on earnings from the latest year, while a forward P/E uses an analyst's forecast of next year's earnings.

Price Stability

Price stability protects the original amount you put into an investment. A Collective Investment Scheme’s price stability is seen in changes in its net asset value over time.

Prospectus

An official document that an investment company may publish, describing the Collective Investment Schemes and the offering of its shares/units. It contains mandatory information.

Rate of Return

The total proceeds derived from the investment per cent initially invested. Proceeds must be defined broadly to include both cash distributions and capital gains. The rate of return is expressed as a percentage.

Redeemable

Preferred shares or bonds that give the issuing corporation an option to repurchase securities at a stated price. These are also known as callable securities.

Redemption Fee

A fee charged by a limited number of funds for redeeming, or buying back, fund units.

Redemption Price

The price at which a Collective Investment Scheme’s units are redeemed (bought back) by the fund. The redemption price is usually equal to the current NAV per unit.

Regional Fund

A Collective Investment Scheme that concentrates its investments within a specific geographic area, usually the fund's local region. The objective is to take advantage of regional growth potential before the national investment community does.

Reinvestment Date

The date on which a unit’s/share's dividend, interest and/or capital gain will be reinvested (if requested) in additional fund units/shares.

Sector Fund

A fund that invests in several specialised industry sectors under one umbrella.

Securities

This is another word for equities, bonds and short-term investments.

Securitisation

A process under which non-marketable assets, such as mortgages, automobile leases and credit card receivables, are converted into marketable securities that can be traded among investors.

Speciality Fund

A Collective Investment Scheme specialising in the securities of a particular industry or group of industries or special types of securities.

Spread

The difference between the rates at which money is deposited in a financial institution and the higher rates at which the money is lent out. Also, the difference between the bid and ask price for a security.

Systematic Withdrawal Plans

Many Collective Investment Schemes offer withdrawal programmes whereby investors receive payments from their investments. These payments are usually drawn from the fund's dividend income and capital gain distributions (if any) and from the principal where necessary.

Total Return

The performance of an investment, including yield (dividends, interest, capital gains) as well as changes in per unit price, calculated over a designated period of time. Assuming reinvestment of capital gains and income distributions, multiply the number of units owned by the Net Asset Value (NAV) per unit. Subtract the original investment from the result. Then divide that figure by the original investment and multiply by 100.

Trade Date

The actual date on which your units/shares were purchased or sold. The transaction price is determined by the closing Net Asset Value on that date.

Transfer Agent

The organisation that Collective Investment Schemes employ to prepare and maintain records relating to unitholder/shareholder accounts. Some Collective Investment Schemes operate in-house transfer agencies.

Trustee

A party that is designated to hold property for another, pending the performance of an obligation. In a deed of trust estate, the trustee is often the title company that handled the property sale closing.

Underwriter

The organisation that acts as the distributor of a mutual fund’s units to broker/dealers and the public.

Volatility

In investing, volatility refers to the ups and downs of the price of an investment. The greater the ups and downs, the more volatile the investment.

Yield

Income or return received from an investment, usually expressed as a percentage of market prices, over a designated period. For a Collective Investment Scheme, yield is interest or dividend before any gain or loss in the price per share.

Zero Coupon Bond

Bond sold at a fraction of its face value. It appreciates gradually, but no periodic interest payments are made. Earnings accumulate until maturity, when the bond is redeemable at full face value.

Investment Portfolio

Oasis has three Investment Portfolios:

  • High Equity Portfolio - New Moon
  • Moderate Equity - Half Moon
  • Low Equity - Full Moon
These are offered to the following products:
  • Retirement Funds
  • Insurance Products

Policy Document

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