Capital growth
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Capital growth - This is an increase (or profit) in value of any investment, excluding any income paid out.

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Cash means money held in bank accounts or on deposit. The amount deposited remains stable, although is subject to inflation which can reduce its value (you invest £1,000, you get back £1,000) and you receive a rate of interest that will vary according to rates available in the market or from the bank or building society. Within investments, a Fund Manager may choose to hold cash as part of their strategy or while waiting for the right time to purchase new investments such as shares or property.

Collective investment
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A fund that is operated by a trust company or a bank and handles a pooled group of trust accounts. Collective investment funds combine the assets of various individuals and organizations to create a larger, well-diversified portfolio.

Corporate bonds
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Are issued by Companies to raise capital. These investments tend to be issued over set periods during which a yield or interest is paid to the holder of the bond. This type of investment tends to pay a higher rate of interest than Government Bonds (or Gilts) as the risk associated is generally seen as higher. These investments can be sold or traded at any time and may not have a set term.

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This is a process of investing across a range of investments with the aim of smoothing out the ups and down of investment growth as not all investments may perform well at the same time. Should one investment perform poorly, better performance from the rest of the portfolio helps to reduce the overall risk of loss.

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The Financial Times Stock Exchange (FTSE) is a company owned by the Financial Times and London Stock Exchange which specializes in the production of indices to measure the performance of a group of Shares. There are a number of indices with the most famous being the FTSE 100 which basically measures the share performance of the largest 100 companies listed on the London Stock Exchange.

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Fund - In investment terms a fund is a pool of money collected from many investors and managed by a professional fund manager. Funds give you the opportunity to invest in a range of companies even if you have quite small amounts to invest. The composition of the fund is decided by the fund manager from time to time. The money in funds is invested in stocks and shares and other types assets such as corporate bonds, Gilts, Property etc. The amount of each asset held will vary.

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These are Government Bonds issued by the British Government.

Government bonds
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A government bond is an investment vehicle issued by a Government to raise capital to support spending. These investments tend to be issued over a set period of time during which, the government pays a fixed yield or interest to the holder. These investments can be sold or traded at any time

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ISA - ISA is short for 'Individual Savings Account'. There are two types of ISA - cash and stocks & shares. Stocks & shares ISAs are simply a tax efficient umbrella under which you can invest in our unit trusts - meaning you have no further tax to pay on your investment returns.

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This is a group or collection of investments held by an individual, investment company or financial. A portfolio can comprise of Shares, Cash, Property, Bonds and other types of investments. The aim of holding a portfolio is spread of risk by means of diversification. A portfolio differs from a 'fund' as described above as it will hold a number of quite separate investments

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The authorised share capital of a company is divided into a number of equal parts. Each part is called a share.

Stock market
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The market in which shares of publicly held companies are issued and traded.

Unit trusts
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Unit trusts are collective investments - meaning your money, along with other investors' monies is pooled together in a fund referred to as a unit trust. This is then managed on your behalf by a professional investment manager who is responsible for investing the money to achieve the funds particular objectives. Please remember that your investment is subject to the usual Capital Gains Tax rules.

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The Markets in Financial Instruments Directive (MiFID) is the EU legislation that regulates firms who provide services to clients linked to 'financial instruments'. For RLUM this covers our Unit Trusts & ISAs.

Helpful websites

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The Governments MAS (Money Advice Service)

The IMA (Investment Management Association)



Royal London