Glossary

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Savings and investment schemes
Allows the purchase of investment trust company shares to be made easily and cheaply through the collection of regular (usually monthly) sums of money or by occasional lump sum contributions.
SEAQ
The London Stock Exchange Automated Quotations system is a London Stock Exchange trading service. SEAQ is a continuously updated electronic notice board containing price quotations of UK securities. Market makers use the system to display the prices at which they are prepared to buy or sell shares.
Secondary Market
Marketplace for trading in securities.
Secured Loans
Secured loans have an origin in private equity. They are the most senior asset class in a capital structure of a company often secured on the assets of the company in questions. In the event of a default, secured loan holders are paid first, equity holders last. Their nature is to pay a dividend of LIBOR plus whilst usually delivering a flat capital return as they are instantly callable at par.
Sectors
Unit trusts and OEICs are divided into a variety of categories, known as sectors, so investors can compare funds with similar objectives and investment strategies. Categories include 'Money market' funds, 'European' funds, 'North American' funds etc.
Securities
Another name for investments such as stocks, shares and bonds.
Self managed investment trusts
An investment trust whose assets are managed by its own team of managers or by the directors of the company, rather than an external management company.
SETs
The London Stock Exchange Electronic Trading Service (SETS) is the London Stock Exchange trading service for UK blue chip securities. It is an automatic electronic order driven trading service that can execute hundreds of trades a second.
Shares
A unit of ownership - in a company or financial asset.
Share Exchange
Some investment trust fund managers offer a share exchange service, whereby a parcel of shares can be converted directly into investment trust shares.
Share Price
The share price is the value of the share at a given moment. It is determined by the balance between demand and supply on stock markets' price of a share. There are different share prices quoted in the market. Bid/Sell is the price offered in the market to buy shares from an investor, also referred to as the selling price. Offer/Buy is the price offered in the market at which shares are offered to investors also referred to as the buying price. The mid-market price is calculated as the mid point between the bid and offer prices and is used to calculate the price related data.
Share price total return performance
The theoretical total return to the investor, including the original ?100 invested at the beginning of the period specified, on a mid-market to mid-market basis, assuming that all dividends received were reinvested in the shares of the company at the time the shares were quoted ex-dividend. Transaction costs are not taken into account. See mid-market price.
Shareholders' funds
See net asset value (NAV).
Share price capital performance
The theoretical capital return to the investor, including the original ?100 invested at the beginning of the period specified, on a mid-market to mid-market basis, reflecting the change in share price over the period. A simple measure of price at the end of the period compared with price at the beginning of the period. Transaction costs are not taken into account.
Short selling/shorting of short
A short seller looks for companies whose shares could fall in value. Short sellers borrow stock in a company from a third party for a set period of time, at an agreed fee. The short seller sells the borrowed stock with the intention of buying the stock back at a later date, at a lower price. The stock is then returned to the lender, with the profit being the difference between the two prices, less the agreed fee.
Single pricing
OEICs and some unit trusts have a single price at which investors both buy and sell. The initial charge is shown separately and is charged in addition to the unit/share price.
SIPP (Self Invested Personal Pension)
A type of personal pension which gives the policy holder more choice about the investments held. With a traditional personal pension, your choice is limited to funds run by the insurance company. With a SIPP you can invest in the shares of any company listed on a stock exchange recognised by the Inland Revenue, which is appealing to people who are interested in the stock market and think they have the knowledge and skill to get superior performance themselves.
Socially responsible investment funds
See Ethical funds
Split capital investment trusts
Split capital investment trusts (splits) are companies with a portfolio of investments just like conventional trusts, but which issue two or more different types of share class. These share classes have specific rights and entitlements to participate in the income and/or capital returns of the portfolio. At least one component share of a split is likely to have a limited life with a fixed wind-up date.
Spread
The difference between the bid price and the offer price of a share.
Stakeholder pension
Launched in 2001 and unlike a normal personal or occupational pension, stakeholder pensions are also available to people who are not currently working, You can contribute up to ?3,600 per year, regardless of your age or earnings. You can invest as little as ?20 and charges must be no more than 1% per year.
Stamp duty
A tax payable on the purchase of shares, property and businesses. All shares purchases incur 0.5% stamp duty. Other assets are charged at different rates, dependant on their value.
Stock exchange indices
Stock exchange indices are calculations made on an index number basis to indicate the movements in the general level of prices of securities listed on stock exchanges.
Stock Swap
Two transactions involving the sale of securities by the seller the consideration for which is satisfied by purchase from the buyer of other securities.
Structural gearing
Split capital investment trusts (splits) may be financially geared but they will also be geared as a result of their capital structure. This is due to the predetermined entitlement and order of priority of the shares within the structure. The returns to each class of share are governed by the effect of the entitlements of the other share classes. The number of share classes and the proportionate entitlement of each determine the level of gearing involved.
Swap
An exchange transaction between two parties which enables one party to exchange something it possess for something it requires. Usually refers to exchanging floating-rate payments for fixed-rate payments.