EXPLANATION OF TECHNICAL TERMS Term Explanation

Asset Classes Different types of investment classes like shares (equities), cash, bonds (fixed interest), property, etc

Benchmark Portfolio

Model investment mix showing the proportion of the fund to be invested in each asset class

Capital Markets Listed markets of investible assets such as share and bonds Custodian Firm that holds the assets on behalf of another organisation Derivatives Complex financial instruments which replicate the behaviour of real assets or

indices Diversification Spreading your risk by investing in a wide range of asset classes Fiduciary Person responsible for looking after something on behalf of another person Passive investing Investing in a fixed basket of securities which dont change Ranges Spread of acceptable benchmark mixes for each asset class Rebalancing Moving asset back towards benchmark proportions Risk Degree of risk in an investment often described as volatility Securities Individual stocks or bonds SIPO Statement of Investment Policies and Objectives Standard Deviation Statistical measure of volatility Transitions Moving investments between fund managers which normally requires selling

and buying Volatility Variability of investment performance over time