Glossary / Woordelys
Assets
Commonly refers to the group of securities and other instruments within a particular portfolio in which the fund is invested. Underlying assets include,but are not limited to: securities, property, participation bonds and an index as determined by an exchange.
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Asset Protection The act of insuring assets against loss or seizure through the establishment of a structure that provides an added layer of protection against law suits, creditors and even governmental agencies. |
Bear market
A persistent and prolonged decline in prices. In the financial markets, a bearish person believes that prices are about to drop. A bear trend is therefore a trend that is moving downwards.
Blanket Coverage
The term "blanket coverage" refers to a category of business insurance policies covering multiple properties that are similar in nature but not at the same location
Bonds
A bond is an interest-bearing debt instrument, traditionally issued by governments as part of their budget funding sources, and now also issued by local authorities (municipalities), parastatals (Eskom) and companies. Bonds issued by the central government are often called “gilts”. Bond issuers pay interest (called the “coupon”) to the bondholder every 6 months. The price / value of a bond has an inverse relationship to the prevailing interest rate, so if the interest rate goes up, the value goes down, and vice versa. Bonds / gilts generally have a lower risk than shares because the holder of a gilt has the security of knowing that the gilt will be repaid in full by government or semi-government authorities at a specific time in the future. An investment in this type of asset should be viewed with a 3 to 6 year horizon.
Budget deficit
The amount by which a government, company or individual’s spending exceeds its income over a particular period of time.The opposite is budget surplus.
Bull and Bear markets.
A bull market is when buyers are optimistic that share prices will rise. A bull trend is a long period of consistently rising share prices, or index levels.Usually such trends last from 2 to 4 years.
A bear market describes a situation where the majority of share prices are dropping and the market is declining generally. The seller of shares expects the price to fall and he/she will be able to purchase the shares at a price lower than his/her selling price, thus making a profit.
Business Continuity
This refers to planning for the essential functions of a business continuing in the event of a disaster, a partner or business owner dying or being unable to perform duties.Buy-sell spread
Units are sold at the buy price and bought at the higher offer price, i.e. the price that you can buy the unit for is the price that the unit trust company offers it for sale. The buy-sell spread varies between different funds and can vary over time as the underlying components change.
Bond
A loan certificate issued by the borrower to repay the amount invested at the maturity of the bond. Bonds are issued as long term instruments/investments.
Borrower
Person or institution that applies to get temporary ownership of another institution’s capital amount for a certain period paying interest on that amount as a reward.
Character
Moral or ethical quality or qualities of honesty, courage, or the like.Cash
An investment in cash usually refers to a savings or fixed-deposit account with a bank, or to a money market investment. Cash is generally regarded as the safest investment. Whilst it is theoretically possible to make a capital loss investing in cash, it is highly unlikely. An investment in this type of asset should be viewed with a 1 to 3 year horizon.
Capital formation
The transfer of savings from households and governments to the business sector, resulting in increased output and economic expansion.
Capital growth - Return on investment
Refers to an increase in the price of units (PI), which occurs as the value of underlying investments rise. These can decrease and result in capital losses.
Capital investments
Provide investor with long term investment requirements and is not used to provide an income.
Capital Market
For the investor who has large amounts available to invest for longer periods,there are numerous investment vehicles available in the long-term investment and loan market, called the capital market. Investments are made in bonds.This must not be confused with home loans or Mortgage Bonds. The major issuers of bonds Eskom, Development Bank, Telkom, Transnet and Land Bank. Bonds are traded on the Bond Exchange of South Africa. Bonds typically pay a lump sum payment on maturity, as well as interim interest (coupon) payments at regular intervals.Research: www.bondex.co.za
Civic Life
Civic life is the public life of the citizen concerned with the affairs of the community and nation as contrasted with private or personal life, which is devoted to the pursuit of private and personal interests.
Collective investment (CIS) fee
The fee fund managers will charge to create your units in the Collective Investment Scheme (CIS) and to purchase your investment. This is expressed as a percentage in the media (including VAT).
Collective Investment Scheme
A type of investment created by a financial institution where investments are made in a wide variety of investments. The institution issues the scheme in units and the holder/owner of a unit gets exposure to a wide variety of instruments, which requires a smaller investment amount, than investing directly on the stock exchange.
Collective Investments
Collective investments are investments in which investors‟ funds are pooled" and managed by professional managers. Investing in shares has traditionally yielded unrivalled returns, offering investors the opportunity to build real wealth. Yet, the large amounts of money required to purchase these shares is often out of reach of smaller investors. The pooling of investors’ funds makes collective investments the ideal option, providing cost effective access to the world’s stock markets. This is why investing in collective investments has become so popular the world over and is considered a sound financial move by most investors.
Competency
The quality of being adequately or well qualified physically and intellectually.
Commodities
Tradable physical products with a market price, which fluctuates from day to day. Examples: gold, coffee, maize, etc.
Company
Refers to public companies allowed to trade their shares on the JSE. The company name normally ends with “Ltd.”
Compound Interest
Compound interest refers to the interest earned on interest that was earned earlier and credited to the capital amount. For example, if you deposit R1 000 in a bank account at 10% and interest is calculated annually, your balance will be R1 100 at the end of the first year and R1 210 at the end of the second year. That extra R10, which was earned on the interest from the first year, is the result of compound interest ("interest on interest"). Interest can also be compounded on a monthly, quarterly, half-yearly or other basis.
Conservation.
Is an ethic of resource use, allocation, and protection. Its primary focus is upon maintaining the health of the natural world: its, fisheries, habitats, and biological diversity. Secondary focus is on materials conservation and energy conservation, which are seen as important to protect the natural world. Conservation also refers to a logical thinking ability.Contingent liability
The amount of money for which a business owner stood surety for on behalf of the business.Coupon
The interest that is earned on a bond (debt instrument). A fixed rate is earned on a set value. With bonds this will be, for example, a rate of 12% on R1 million.
Consumer Price (CPI)
The consumer price index measures price changes for goods and services at the retail (shop) level. This index is an indication of inflation in a country.
CPU
Cents per unit (as expressed in the media) that was earned by the investor during the past 12 months by CIS fund.
Credit or debit loan accounts
A loan account is the amount owed to or by a business entity such as a close corporation or company. When an owner starts a business, he or she would have to put in money via a loan account and may take out money via the loan account. When the business owes the owner money, the account is referred to as a credit loan account, and when the owner owes the money to the business, as a debit loan accountCreditors
Persons or firms to whom you owe money.The net flow of current transactions, including goods, services and interest payments, between countries.
Current account balance
The difference between a country's exports and imports. A positive current account balance indicates that a country is exporting a higher value of goods, services and assets than it imports.
Debentures
A debenture is a loan certificate issued by a borrower for a certain period. The investor would receive a fixed interest on the full amount of his investment from the borrower and the full amount at redemption. The typical period is 3 to 6 months. An example would be when a company needed capital upfront, it would approach a financial institution in order to raise money. The Bank, for example, would lend the money to the company at a fixed interest rate and after the agreed period, the company would have to pay back the full amount to the Bank.
Deed
The agreement between a manager and a trustee or custodian, or the document of incorporation whereby a CIS is established and in terms of which it is administered and includes the deed of a CIS Manager.
Deflation
A decline in general price levels, often caused by a reduction in the supply of money or credit. Deflation can also be brought about by direct contractions in spending, either in the form of a reduction in government spending, personal spending or investment spending. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. Opposite of inflation.
Debtors
A Persons or firms owing you money.Dialog
Conversation between two or more persons, characters in a novel, drama or an exchange of ideas or opinions on a particular issue.
Dividends
When you buy equities offered by a company, you are effectively buying a portion of the company. Dividends are an investor’s share of a company’s profits, given to him or her as a part-owner of the company.
Dividend Yields
The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. The higher the yield, the more money you will get back on your investment.
Depreciation
The decline in the value of an instrument or product.
Derivative
A financial instrument such as a future or option that relies on another underlying asset to “derive” its value.
Disinflation
A drop in the inflation rate, i.e. a reduction in the rate at which prices rise.
Disposable income
The amount of income left to an individual after taxes have been paid, available for spending and saving.
Diversification
The spreading of an investment between different sectors, markets and instruments in order to decrease the overall loss of an investment should one instrument not perform.
Dividend
Distribution of net profits from a company to its shareholders.
Domain name
A unique Internet ''address'' that identifies a web site, consisting of a main part (your name) followed by a suffix indicating the nature and country of origin of the web site (.org, .com or .biz,.za,.uk). The main part of the domain name is usually chosen to be the same as or similar to the name of a company, product or service it represents.Due diligence
The process of investigation, performed by investors, into the details of a potential investment, such as an examination of operations and management and the verification of material facts.
Emerging markets
A financial market of a developing country, usually a smal market with a short operating history.
Earnings per share
Earnings per share is a measure of how much money the company has available for distribution to shareholders. A company’s earnings per share is a good indication of its profitability and is generally considered to be the most important variable in determining a company’s share price.
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Employee Benefits Non-salary compensations that employees receive in addition to their normal pay, and which could be in the form of housing, group insurance, disability insurance and retirement benefits. Endurance The ability or strength to continue or last, especially despite fatigue, stress, or other adverse conditions |
Equity
A share represents an institution/individual’s ownership in a listed company and is the vehicle through which they are able to “share” in the profits made by that company. As the company grows and the expectation of improved profits increases, the market price of the share will increase and this translates into a capital gain for the shareholder. Similarly, negative sentiment about the company will result in the share price falling. Shares/equities are usually considered to have the potential for the highest return of all the investment classes, but with a higher level of risk i.e. share investments have the most volatile returns over the short term. An investment in this type of asset should be viewed with a 7 to 10 year horizon.
Equity Market
The equity market is the market where equities are traded. Equities known as ordinary shares, are shares issued by a company which if held, make the holder a part owner of the company and gives them the right to vote at annual general meetings, elect directors and benefit from profits of the company in the form of dividends, if declared.
Estate Planning
The overall planning and administration of a person's wealth, which includes (but is not restricted to) the preparation of a will, in order to manage and preserve assets while the person is alive and control the distribution thereof after death.Financial Markets
Financial markets are the institutional arrangements and conventions that exist for the issue and trading of financial instruments such as shares, bonds, traded gold coins, etc.
Fiscal stimulus
Economic aid granted by a governmental body of a country to individuals within its own country in hopes of trying to spur growth within its own economy.
Fiscal policy
Decisions by government, usually relating to taxation and government spending, with the goals of full employment, price stability, and economic growth.
Fixed Interest Funds
Fixed interest funds invest in bonds, fixed-interest and money market instruments. Interest income is a feature of these funds and in general, capital should remain stable.
Foreign exchange rates (forex)
Used to express the difference in value between the currencies of different countries.
FTSE 100
An index on the London stock exchange of the top 100 companies.
Future
An agreement in which the seller agrees to deliver a commodity or other instrument at a specified date at a predetermined price to the buyer for cash or cash equivalent.
Gearing
In its simplest form, gearing is the act of borrowing money to invest at a rate of return that exceeds the interest due on the borrowed amount. It is often expressed as a ratio of debts to long-term funds earning fixed interest. The higher the gearing (or leverage) ratio, the more speculative the position.
Gilts Gross Domestic Product (GDP)
The Gross Domestic Product measures the total volume of goods and services produced in the economy. Therefore, the percentage change in the GDP from year to year reflects the country's annual economic growth rate.
Growth Funds
Growth funds seek maximum capital appreciation by investing in rapidly growing companies across all sectors of the JSE. Growth companies are those whose profits are in a strong upward trend or are expected to grow strongly and which normally trade at a higher-than-average price/earnings ratio.
Growth
The government borrows money for a specific period at a specific interest rate and guarantees to pay a specific interest rate and the capital. Gilts are usually seen to be very safe investments as there is very little risk that the debt will not be repaid. This is usually done by government raising capital for large projects by issuing medium and long-term fixed interest-bearing securities on the capital market.
Index
Is a value tracker/indication of a group of underlying instruments. For example, an index can be compiled on the value of all the gold shares on the JSE. If the value of the shares in total increase the index will increase. An index reflects the overall growth or lack thereof, in a selected market or part of a market. The best-known index in South Africa is the All Share Index (ALSI).
Indices
Are often sector-based, giving an indication of what happened in the sector as a whole. It is also a benchmark against which to measure the performance of your investment.The performance of most investment markets is measured by indices which are a collection of shares.
Industrial Funds
Industrial funds invest in selected industrial companies listed on the JSE, but excluding all companies listed in the resources and financial economic groups.
Income - Return on investments
The income comes from two sources, via dividends and interest. Dividends are paid by shares and interest is earned on the cash / bonds held in the portfolio.
Ingenuity
Refers to the process of applying ideas to solve problems or meet challenges. The process of figuring out how to cross a mountain stream using a fallen log, build an airplane from a sheet of paper, or start a new company in a foreign culture, all involve the exercising of ingenuity.
Income investments
Provides a moderate flow of income to meet income needs.
Inflation
The rate at which prices increase from one year to the next for the same value/commodity.
Industrial production
Total output from industrial activities, such as mining,manufacturing and utilities.
Integrity
Is a concept of consistency, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the honesty and truthfulness of one's actions.
Instruments
Different types of investments. These can include equities (shares), bonds, cash and property.
Interest
For the investor, this means that ownership of his/her money (cash) is temporarily transferred to someone else and a premium is then received for the usage.
Interest bearing instruments
Interest bearing instruments pay interest on the amounts invested. Examples are call deposits, notice deposits, fixed deposits, negotiable certificates of deposit (NCD’s), short-term government stock, interest rate instruments issued by the private sector and short term debentures. Alternatively investors can access these instruments via money market funds.
Investments
Actions taken by investors / business to increase their surplus funds adding growth to capital.
Investment Portfolio
An investment portfolio is a collection of securities owned by an individual or institution (such as a collective investment scheme). A fund's portfolio may include a combination of financial instruments such as bonds, equities, money market securities, etc. The theory is that the investments should be spread over a range of options in order to diversify and spread risk.
Liquidity
Liquidity refers to the ease and speed with which an investment can be converted into cash. It is important to explain to an investor that the price paid for high liquidity of an investment is normally low interest rates. It also indicates the measure of how tradable an instrument is in the market.
JSE Securities Exchange
The primary role of the JSE Securities Exchange is to provide a market where securities can be freely traded under regulated procedures.
Key Person
An individual whose skills, creativity, presence or reputation is critical to the continued success of a business and without whom the business may suffer losses.
Legal Entity
An organisation, institution or being that has its own existence for legal purposes. Examples are a close corporation and a company.Manager
A person who is authorised in terms of the Collective Investment Schemes Control Act (CISCA) to administer a CIS or the legal entity (person) in practice known as the unit trust management company.
Market
A place where buyers and sellers meet, agreeing on a certain price for an object / service driven by supply and demand. In South Africa, we have the capital market, equity market and money market.
Mentor
An expert in a particular field of business offering his or her knowledge and experience, usually for free, to a business with the aim of nurturing and guiding the new business through the difficult first few years.Money market
The money market is the market where liquid and short-term borrowing and lending take place. The instruments traded in the money market are generally very safe investments and return a relatively low interest rate that is suitable for temporary cash storage, i.e. bank accounts.
Money supply
The total supply of money in circulation in a given country's economy at a given time
Monetary policy
Monetary policy is the process by which the government, central bank, or monetary authority of a country controls (i) the supply of money, (ii) availability of money, and (iii) cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.
Money market funds
Money market funds derive their name from the wholesale markets where banks lend and borrow large sums of money. Due to this access to wholesale markets, the yield (a percentage return on investment) offered, is higher than those offered by retail banks. The money market managers place clients’ funds on the best possible terms with institutions wanting to borrow money for short periods of time. These funds are restricted to interest bearing investments with an average maturity of 90 days or less. In most countries, money market funds are used as a “parking space” for funds waiting to be invested elsewhere or as a refuge against weakness in the equity markets.
Net asset value (NAV)
This represents the selling price per unit or the net worth of your underlying share investments. The total market value of all assets in the portfolio including any income accruals and less any permissible deductions from the portfolio divided by the number of participatory interests in issue.
Offshore
International, outside South Africa. An offshore investment is defined as an investment held outside the common monetary area of South-Africa. Offshore investments are denominated in foreign currencies and therefore require the investment to be converted into that particular currency or currencies when the investment is made.
Open-ended investment company
A company with an authorised share capital, which is structured in such a manner that it provides for the issuing of different classes of shares to investors, each class of share representing a separate portfolio with a distinct investment policy. Also known as a company structured in such a way that investors can collectively invest in portfolios consisting of shares.
Operational ability
An FSP must have and be able to maintain the operational ability to fulfill the responsibilities imposed by the Act on authorised financial services providers, including but not limited to the following:
- a fixed business address;
- adequate access to communication facilities including at least a fulltime telephone or cell phone service and typing and document duplication facilities;
- adequate storage and filing systems tor the safe-keeping of records, business communications and correspondence;
- an account with a registered bank including, where required by the Act, a separate bank account for client funds; and
- an FSP who is an accountable institution as defined in the Financial Intelligence Centre Act, 2001, must have in place all the necessary policies, procedures and systems to ensure full compliance with that Act and other applicable anti-money laundering or terrorist financing legislation.
An option gives the holder the right to buy or sell an instrument (for example a share, future, etc.) within a specified time frame at a set price.
OTC
Over the counter.
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Pension Fund A retirement savings vehicle for employees. Both employer and employee contributions are, within certain limits, deductible for income tax purposes. Unless the total benefit is R247500 or more at retirement, only one third of the benefit may be commuted for a lump sum and the balance must be used to provide a pension to the employee. If the total benefit is R247500 or less the whole amount may be commuted. |
Price to earnings ratio
Price to earnings ratio or p: e ratio is calculated by dividing the price per share by the earnings per share. This ratio provides a better indication of the value of a share, than the market price alone. For example, all things being equal, a R10 share with a P/E of 75 is much more “expensive” than a R100 share with a P/E of 20.
Participatory interest
Commonly refers to the number of units or shares in a portfolio purchased by an investor.
Producer Price Index (PPI)
This measures price changes of goods only at producer level (i.e. in the production chain prior to retail). This is an indication of inflation in a country.
Property
Property has some attributes of shares and some attributes of bonds. Property yields are normally stable and predictable because they comprise many contractual leases. These leases generate rental income that is passed through to investors. Property share prices however fluctuate with supply and demand and are counter cyclical to the interest rate cycle. Property is an excellent inflation hedge as rentals escalate with inflation, ensuring distribution growth, and property values escalate with inflation ensuring net asset value growth. This ensures real returns over the long term.
Property unit trusts
Property unit trusts are listed on the JSE Securities Exchange and are made up of a portfolio of investment properties divided into units. The value is determined by supply and demand within the JSE. Dividends are paid twice a year. All income is distributed to the unit trust holders. The income generated on property unit trusts is taxed in the hands of the unit trust holder and not the unit trust.
P/E Ratio
The Price-Earnings ratio is the price of the share divided by its earnings per share. “It gives the investor an idea of how much they are paying for the company’s earning power. An example is a share which sells for R20 with earnings per share of R1 last year, has a P/E Ratio of 20. If the same share has a projected earnings of R2 per share for the following year, it will have a forward P/E of 10. The higher the P/E, the more investors are paying and therefore the more earnings growth they are expecting”.Source:“Understanding Unit Trusts” by Nic Oldert.
Portfolio
Commonly refers to the particular group of underlying assets in which the fund is invested.
Primary and secondary markets
The primary market denotes the first issuing of the money market instrument.The secondary market is where the sale and purchase of the primary instruments are negotiated and made transferable.
Provident Fund
A retirement savings vehicle for employees. Only contributions by the employer are, within certain limits, deductible for income tax purposes. The full benefit is paid in a lump sum to an employee at retirement.Reflation
The intentional reversal of deflation through a monetary action by a government.
Rand cost averaging
Rand cost averaging is based on the principle that a level monthly premium will buy more units when the market is low and fewer when it is high. Over a long term the investor eliminates the risk of putting a lump sum in at the top of the market. Rand cost averaging results in the investor buying units at an average price over a period of time.
Repro rate
The rate at which banks fund themselves by borrowing funds from the South African Reserve Bank (SARB).
Recession
The United States-based National Bureau of Economic Research (NBER) defines economic recession as: "a significant decline in [the] economic activity spread across the country, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production and wholesale-retail sales."
Resources and Basic Industries Funds
These funds seek capital appreciation by investing in the shares of companies whose main business operations involve the exploration, mining, distribution and processing of metals, minerals, energy, chemicals, forestry and other natural resources, or where at least 50 percent of their earnings are derived from such business activities and excludes service providers to these companies.
Restraint of Trade
An agreement between parties that limits trade or sales of a specific product or service, usually entered into when one of the parties leaves a firm to set up an own, usually related or opposing business.
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Retirement Annuity Fund A retirement savings vehicle which does not require the involvement of an employer. A member's contributions are, within certain limits, deductible for income tax purposes. If the total benefit is R247500 or more at retirement only one-third of the benefit may be commuted for a lump sum and the balance must be used to provide a pension to the member. Retirement may be at any time from age 55. |
Return on investment
The return to the investor comes from two elements: Capital growth and Income.
Risk
In the investment context, this means that the investor might lose his / her money or have less return than expected.
Risk - collective investments
All collective investments have a certain degree of risk – the capital invested is never guaranteed (even for the money market). Because the value of the PI (units) is derived from the value of the underlying securities, PI (units) prices fluctuate according to movements in the stock, bond and money markets. If the markets depreciate, the values of the PI will also decline and vice versa. Factors that can influence the volatility of a portfolio are: The cash portion in the portfolio – more cash, less volatility. The type of securities that the portfolio invests in e.g. large cap, small cap. Sectors or regions that the portfolio is invested in e.g. offshore investment, will be subjected to currency fluctuations that will influence the volatility.
Risk Management
Managing and providing for probable events that could result in loss of income, assets or lifeSector
A particular segment in the market. For example, the gold sector will represent gold investments such as gold share companies (like Anglo Gold) or insurance will include Liberty Life, Sanlam, Momentum etc.
Securities
Includes shares, stock, participatory interest in a CIS, debentures, debenture stock, debenture bonds, unsecured notes.
Security
Security is the degree of protection against danger, damage, loss, and crime. Security as a form of protection are structures and processes that provide or improve security as a condition.Smaller Companies Funds
Smaller Companies Funds seek maximum capital appreciation by investing in both established smaller companies and emerging companies. At least 75 percent of the fund must be invested in small- to mid-cap shares which fall outside of the top 40 JSE-listed companies by market capitalisation
Shares
Equities are shares, which represent part of the equity ownership of a company. When a person buys a share, he/she is paying for a small amount of everything that the company owns and is known as a shareholder. Each share represents the amount of money, which each individual investor has invested in the company. Shares are issued to a shareholder by a company certifying ownership of a particular portion of the assets of the company.
Surplus
Amount available after all expenses have been paid.
Suretyship
A contract whereby a person obliges himself on behalf of a debtor to a creditor, for the payment of the whole or a part of what is due from the debtor.
Trade account
A 
country's exports minus its imports; the largest component of a country's balance of payments.
Trademark
A name or symbol by which a product is uniquely identified. A trademark is officially registered, which legally prohibits any party other than the registered owner from using it.
Unitisation
Refers to pooled assets, owned by more than one entity.
Unitised investment product
A unitised investment product, also called customised asset portfolios is made up of underlying securities, as in the case of unit trusts. It has a unique risk / return profile which attracts specific investors.
Value-added tax
A consumption tax levied at every production stage of a product or service, based on the value added to that product or service, and paid over to the Receiver of Revenue.
Value Funds
These funds aim to deliver medium- to long-term capital appreciation by investing in value shares with low price / earnings ratios and shares which trade at a discount to their net asset value.
Volatility / Fluctuations
A measure of the lack of stability in the price of a security or investment [bond, equity, property]. A share or bond with a high volatility will tend to rise or fall sharply in value within a short period. A very volatile investment is generally regarded as being very risky as its value can change dramatically in a short period of time.
Warrants
A warrant gives the investor the right to purchase or sell shares at a specified date in the future and at a specified price. A warrant gives the warrant holder the right to buy the underlying securities from the issuer (in the case of a call warrant) or to sell the underlying securities to the issuer (in the case of a put warrant), at a pre-determined price (“the strike price”), at any time from the date of issue until a pre-determined future date (“the exercise date”) or only on the pre-determined date.
Yield
The yield of a unit trust is a measure of the income produced by a unit trust as a percentage of the unit price. It is the percentage return on an investment, usually expressed as an annual rate. The yield of a unit trust is the annual income expressed as a percentage of the re-purchase (selling) price. The figure quoted is the gross yield before tax.
