Glossary of terms

No doubt you've heard the term 'financial jargon'. This glossary provides you with a simple guide to the investment terms you'll find on the RaboDirect website. Click on the alphabet letters below to help yourself to a clearer understanding.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Income

Includes the stream of payments to the owner of an investment. Usually, payments are made on a regular basis and may represent a large part of the return (as in the case of bonds) or a smaller part (as in the case of shares).

Income Portfolio

A portfolio consisting of securities whose main attraction lies in the steady income they provide rather than their capital growth.

Income Splitting

Term used to describe the practice of dividing a flow of income between two or more people, usually between a couple.

Income Stream

A regular flow of money generated by an investment.

Index

A numerical measure of price movement in financial markets, such as a price index or stockmarket index. An index can be used as a benchmark against which to measure fund performance.

Index Fund

A fund with a portfolio that is structured with the objective of matching the return of a specified financial market index.

Inflation

A rise in the prices of goods and services, often equated with loss of purchasing power.

Interest

The return offered by banks on deposits and governments and corporations on bonds they have issued, as a reward for lending them money.

Investment and Financial Services Association (IFSA)

The Investment and Financial Services Association Limited is a national not-for-profit organisation representing the retail and wholesale funds management and life insurance industries. IFSA's 100 members invest approximately $725 billion on behalf of over nine million Australians. IFSA's primary role is to communicate with governments, regulators, other industry groups, media and the community on investment and financial services issues. IFSA also promotes sound industry practices and provides information and education for its members.

Investment Committee

The Investment Committee is responsible for managing and maintaining the relationship with fund providers and managed funds offered by RaboPlus and ensuring that these funds continue to meet our selection criteria. The Investment Committee is required to uphold our selection philosophy, safeguard the selection criteria, guidelines and procedures of the selection criteria.

The role of the Investment Committee is not to verify the quality of the fund providers and/or managed funds.