Many securities carry some sort of income return, whether a coupon on a fixed income security or a dividend on a share. However some securities offer a coupon or dividend of zero. Instead these securities offer future capital gains. As such, in the case of a zero coupon bond for example, they may be issued …
This is watched closely by investors because a change can be early warning of broader changes in the economy. When, for example, the yield curve starts to flatten, such that short and longer-term yields are similar, it can be a signal that a full inversion may occur. In the past, this has tended to coincide …
A yield curve is a graph that shows how yields on similar fixed income securities change.. It does this by plotting the yield on securities with different maturities and then connecting them using a line. Usually the resulting “curve” for say UK gilts slopes upwards from left to right – shorter dated bonds having lower …
Wills are legal documents that deal with some crucial issues that only arise when you die. These include who will act as your executor and distribute your assets on death and who will act as guardian to your children. Someone who dies without a will is said to have died intestate. READ MORE
This is short for volume weighted average price. It is, as the name suggests, the average price weighted by volume. For example if four securities have prices of £1, £2, £3 and £4 the average is £2.50 ((£1+£2+£3+£4)/4). However if there are 500 of the first three securities and 2000 of the fourth, the VWAP …
This is the extent to which an asset prices rises and falls and also the speed with which it does so. As such it is a way of describing the price risk associated with that asset. As a rule of thumb the higher the volatility of an asset the greater the returns an investor should …
An index, created by the Chicago Board of Trade, to measure volatility. Also known as the “fear gauge” the Vix captures in a single number the volatility in S&P 50 stock prices expected by Chicago-based options traders. The higher the Vix, the greater the expected volatility in the stock market. READ MORE
This is a vehicle that allows investors to back fast growing, early stage companies via a trust structure that is listed on the London Stock Exchange. Since this is a high risk investment there are tax breaks available including a maximum 30% rebate of your initial investment (subject to conditions) and a capital gains tax …
This is a collective investment scheme that does not have authorisation from the FCA. As such it is not illegal but is subject to constraints on how, and how widely, it markets itself to investors. READ MORE
Unit trusts are open ended investment vehicles set up to make money on behalf of investors. The term open ended refers to the fact that they can grow and contract as demand for units either expands, or contracts. So for example if a client wants to buy units in a fund, the fund can create …
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