Glossary

The most important terms from the world of funds - arranged alphabetically. Click one of the letters to display the relevant terms.

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

Financial Statement

The investment fund is obliged to produce a management report annually for each investment fund. This report states the fund's asset values and the number of fund equities at the start and end of the period. It also contains an earnings statement. The fund's tax details are discussed in a separate chapter. The management report must be presented to the investment trust's supervisory board and made available to all interested parties.

Floating Rate Risk

Refers to the connection between a change in a bond's market interest rate and the rate performance. If interest rates rise a bond's price falls (or vice versa). If a bond is sold before maturity this may lead to a corresponding capital gain or loss (see also Duration).

Fund Assets

The total value of all the assets in a fund. Depending on the fund type this is made up of equities, fixed and variable interest bearing securities, cash reserves and other assets. The fund's assets are valued daily at market prices.

Fund Conditions

The fund conditions regulate the legal shareholder's relationship to the capital investment company and the custodian bank. They are part of the annual management report and can therefore be viewed by the customer at any time.

Fund Management

The investment trust's fund management makes all purchasing and sales decisions.

Fund Manager

Investment and securities specialists who invest the fund's assets.

Fund Monitoring / Screening

The fund selection process used to analyse the fund quantitatively (performance and risk) and qualitatively (fund structure, fund company, tax and legal requirements).

Fund Picking

The fund selection process used to analyse the fund quantitatively (performance and risk) and qualitatively (fund structure, fund company, tax and legal requirements).

Fund Structure

(See: Asset Allocation)

Funds

Funds are special funds containing securities and real estate that are managed by capital investment companies The returns from investment funds (interest rates, dividends, realised rate rises) are either distributed to the investors (=distributed earnings funds) or reinvested (=cumulative funds).

Funds of Funds

Funds of funds are funds that invest in various different investment funds rather than in individual securities.

Futures (= Financial Futures Contract)

A future is an obligation to buy or sell a certain basis value (share, bond, currency, raw material etc.) at a specifically defined point in time and for a fixed price. Futures are used both for hedging and also as a speculative investment instrument.

Futures Market

Market for Financial Futures Contract