Investments Glossary

By Irish Life Assurance

An asset is what you invest in. Assets can be all kinds of things from art or antiques to more traditional investments like shares, property, and bonds. They can be tangible (physical items) or intangible (things that don’t physically exist but still have monetary value).

The process of overseeing an asset to reduce risk, often with the aim of earning a positive return.

A loan of money from an investor to a company or government.

Money/resources pooled from several investors and used to buy bonds.

The in increase in your asset’s value over time. Capital Growth = Current Value – Purchase Value

How secure the capital is that you invest. Cash deposits, for instance, have high capital security because you always get back at least the amount you invested.

A tradable item that can generally be further processed and sold, i.e., metals, wheat, coal, etc.

The degree to which the values of two or more assets move in the same direction.

One strategy to manage risk by choosing a variety of asset classes so as to not put all of your eggs in one basket. If the value of one asset falls, simultaneously another might increase, lowering the risk of overall loss.

Share markets in developing economies like Asia and South America. These markets are usually fast-moving and can offer strong returns, but they can be high risk.

A mutual fund investing in company shares.

Loans typically taken out by a company or government.

Money combined from several investors to be used for a specific purpose.

The Net Asset Value of the fund, calculated as the total value of the fund’s portfolio, less its liabilities, which can include the cost of selling the asset.

The value of the fund, calculated by multiplying the number of units by the unit price. For example: If you have 100 units in a fund and each one is worth €1.50. The fund value is €150.

Measurement of the price performance of a group of assets.

Measurement of the performance of a market index.

The rate at which the value of prices for goods and services increases, and as a result, at which buying power decreases.

Buying an asset (something of value) in the hope that the asset’s value will increase over time, at which point you can sell said asset and make a profit.

A bond rating showing that the bond issuer is considered to be able to meet its obligations, exposing investors to a reduced level of risk. The grade a bond is rated as is based on several criteria, including the likelihood that the bond issuer will be able to pay interest and repay the amount you originally invested, in full and on time.

A fund that is overseen by an expert in investing. They’re knowledgeable about the assets and market, so can help manage risk and reduce costs.

The hypothetical portfolio of assets which represent one segment of a market.

A fund invested in different asset classes, for example property bonds and shares.

MAPS are a range of unit linked funds that are invested across multiple types of assets and are available across Irish Life Assurance investment plans. The funds range from lower to higher risk depending on the combination of assets and their volatility.

Investors’ money buys units in a fund which then invests in a portfolio of assets, such as shares, currencies, properties, etc.

A collection of assets.

The profit or loss made on an investment over a period of time.

The chance that an investment’s actual return will be different than projected.

A company’s ownership is divided into shares – think of a share as one slice of a pie. The value of shares can rise and fall in line with the company’s performance. The terms share, stock, and equity are often used interchangeably.

The current general direction of movement (positive or negative) of asset values.

The seller of an asset.

The change in price or value of an asset, especially in the short term. Low volatility = less risk of large changes in value. High volatility = higher risk of drastic ups and downs.

An investment’s return expressed as an annual percentage.