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Financial Planning
Glossary
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A
Accumulation Fund
Generally, a superannuation fund to which you and your employer make
regular contributions which accumulate and when invested, generate
earnings.(to be contrasted with a "Defined Benefit Fund").
Actuary
A person trained in mathematical or statistical methods, which relate
to the technical aspects of investment and insurance. An actuary applies
the theory of probability - the chances of something happening - to
insurance, superannuation, pensions, and other forms of investment.
They calculate the present cost of paying a future benefit in the
event of something happening.
ADF
Approved deposit fund.
Administrator
A person appointed by a court to administer the estate of a person
who has died without leaving a will. Also appointed where the appointed
executor is unable or unwilling to perform their duties.
Aggressive Portfolio
A portfolio which is designed to provide above - average returns by
taking above - average risks. Typically an aggressive portfolio will
have a relatively high exposure to equity investments.
Allocated Pension
A retirement income arrangement where a lump sum is invested, then
an annual pension is drawn down. The Government fixes the maximum and minimum pension
that may be taken during the year.
All Ordinaries Index
Measures the market prices of the major stocks as an index figure
which compares current prices to a price at some prior point in time.
The All Ordinaries Index is calculated using the current prices of
over 200 Australian companies listed on the Australian Stock Exchange.
Amortisation
Paying interest on a loan by gradual reduction through instalments
comprising of both principal and interest, (also known as a Credit
Foncier Loan).
Analyst
Someone trained to investigate all facts concerning a security or
industry and reach a dependable conclusion about its merits.
Annuity
An arrangement wherein a person invests a lump sum and receives periodic
payments - usually used to provide retirement income.
ASFA
Association of Superannuation Funds of Australia.
ASIC
Australian Securities and Investments Commission.
Asset Allocation
The ratio of different types of asset classes within an investment
portfolio, eg. Cash, Shares, Property.
Assets
Resources held by a company.
ASX
Australian Stock Exchange.
B
Balanced Fund
A diverse portfolio including a range of asset classes, eg shares,
cash, property, fixed interest in roughly equal proportions.
Benchmark Portfolio
A method for measuring a fund manager's risk/return performance against
a standard model portfolio which reflects the investor's preferred
level of risk/return over a complete market cycle.
Blue Chip Stock/Companies
Companies known for their ability to make solid profits. These companies usually set the market level and are known
for excellent management and strong financial structure.
Bonuses
Annual tax paid income made by Insurance companies and Friendly Societies.
If you leave the bonuses with the insurer or society for 10 years,
there is no further tax obligation. If you draw the money out earlier
than 10 years, the bonuses and tax benefits may not fully materialise.
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© 2008 Australian Unity Ltd |
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