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 RaboPlus 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

Active Management: A style of investment management that seeks to achieve investment returns above a set benchmark by constantly monitoring and, if necessary, changing asset allocation and security selection.
Aligned Advisors: Financial advisers (other than in-house sales staff) who have an agreement with one or more fund managers relating to the distribution and sale of financial products.
All Ordinaries Index: An index that tracks the price of share movements in the major listed companies on the Australian Stock Exchange (ASX). For example, if the majority of share prices increase, the All Ordinaries index may be positive.
Allocated Pension/Annuity: A retirement income where an individual draws a pension from a lump sum investment that is earning a return, and therefore growing. Investment performance and returns are not guaranteed and investment risk is borne by the investor and not the provider of the allocated pension or annuity. Allocated pensions or annuities can have tax and Social Security advantages.
APIR Product Identification Code: The industry code used to identify unlisted investment products.
Approved Deposit Fund (ADF): Introduced in 1984 as an 'approved' fund for receipt of superannuation lump sum payments. Due to subsequent legislative changes, superannuation funds can accept lump sum or rollovers so ADFs have become less relevant.
Asset Allocation: The way money in an investment portfolio is divided among the asset classes, eg. Australian shares, international shares, property, fixed interest and cash.
Asset Class: Major groupings into which investments are categorised based on common features. Well-known examples include: Australian shares, international shares, property, fixed-interest and cash. Often within these asset classes other sub-groupings are identified, for example within share-based investments, industrial shares or even transport sector shares might be regarded as different asset classes.
Australian Financial Services License (AFSL): A license issued by the Australian Securities and Investments Commission which permits the issuing of a financial product or giving of financial product advice.
Australian Prudential Regulation Authority (APRA): The government body responsible for the regulation of most superannuation funds. (Self Managed Super Funds are regulated by the Australian Taxation Office.)
Australian Securities and Investments Commission (ASIC): The Australian Securities and Investments Commission is an independent government body that enforces and regulates company and financial services laws to protect consumers, investors and creditors.
Australian Stock Exchange (ASX): The Australian Stock Exchange Limited operates Australia's primary national stock exchange for equities, derivatives and fixed-interest securities. It also provides comprehensive market data and information to a range of users.
Australian Taxation Office (ATO): The Australian Taxation Office is the Federal Government's main revenue collection agency. The ATO aims are to manage and shape the revenue systems that sustain social and economic policy and fund services for Australians.