Glossary
The words the guides keep using
Short definitions, each pointed at a longer note. This is a map, not a textbook.
- Accumulating ETF
- A fund that reinvests dividends inside the fund instead of paying them out as cash. The value shows up in the fund price. Read the guide
- Asset allocation
- The mix of investments you choose — for example, shares, bonds, and cash — based on when you might need the money. Read the guide
- Broker
- The firm that holds your account and lets you buy and sell investments. The broker is the shop. The fund is the product. Read the guide
- Compound growth
- Growth on money that already includes earlier growth, when returns are left invested. It is arithmetic, not a guarantee. Read the guide
- Distributing ETF
- A fund that pays dividends out to you in cash. You can spend them or buy more shares yourself. Read the guide
- Diversification
- Spreading money so one company’s failure is not the whole result. A broad fund does this inside a single purchase. Read the guide
- Dollar-cost averaging
- Investing a fixed amount on a schedule, whatever the price is that day. For most earners it is simply how pay arrives. Read the guide
- Emergency fund
- Cash set aside for surprises, kept out of the market so a bill does not force you to sell investments. Read the guide
- ETF
- An exchange-traded fund: a basket of investments you buy on a stock exchange in a similar way to a share. Read the guide
- Expense ratio
- The annual percentage fee a fund charges, taken inside the fund. Also called the ongoing charge, OCF, or TER. Read the guide
- Fractional share
- A piece of one share or ETF unit, so you can invest less than the full sticker price. Read the guide
- Index fund
- A fund that follows a published market index instead of trying to pick winners. Many ETFs are index funds. Read the guide
- Inflation
- A rise in prices that reduces what a fixed amount of cash can buy, even when the cash balance never falls. Read the guide
- ISA
- A UK account that can shelter savings or investments from UK tax, within a government allowance that changes. It is not available to everyone. Read the guide
- Pie
- On Trading 212, a group of holdings inside your account that can split new money by weights you set. A pie is not itself a fund. Read the guide
- Rebalancing
- Moving a portfolio back to the mix you originally chose after markets have pushed the weights apart. Read the guide
- Spread
- The gap between the price you can buy at and the price you can sell at. A quiet, rarely traded fund can have a wider spread. Read the guide
- Time horizon
- How long you can leave money invested before you need to spend it. The horizon decides how much of a fall you can sit through. Read the guide
- UCITS
- A European set of rules for how many retail funds are structured and disclosed. It is a regulatory label, not a performance promise. Read the guide
- Volatility
- How much a price moves around. A volatile fund is not automatically a finished loss. Selling during the move can make it one. Read the guide