Financial jargon explained

Here you’ll find a simple explanation of some of the most commonly used investment terms. If there is any other financial jargon you want translated, please call our Customer Service Team free on 0800 597 2525 or email us at enquiries@willisowen.co.uk and they will be pleased to help.

  


E

Effective Duration

Effective duration provides a measure of a fund’s interest-rate sensitivity.

The longer a fund’s duration, the more sensitive the fund is to shifts in interest rates.

The relationship among funds with different durations is straightforward: A fund with duration of 10 years is expected to be twice as volatile as a fund with a five-year duration.

Equalisation

The amount of any undistributed income already included in the price of the units/Shares at the time of investment. Read the full help article.

Exchange-Traded Products (ETPs)

ETPs are products which own Shares in, or track the performance of Shares in, an index, or the price movements of other investments, such as oil. They are listed on a stock exchange.

One type of ETP is Exchange Traded Funds (ETFs) and these comply with the rules (known as UCITS) which protect retail investors. See also Exchange-Traded Funds.

However, there are other types of ETPs, known as Exchange Traded Notes (ETNs) or Exchange Traded Commodities (ETCs). These do not comply with the UCITS rules so offer less investor protection and may use complex financial techniques.

Execution-only

A service that is undertaken upon the instruction of a client but that does not provide advice.

Exposure

The proportion of a Fund that is invested in a particular asset class, or particular Share or bond or other investment, expressed as a percentage of the value of the Fund. 

Authorised Funds are subject to rules that set limits on such exposures.

Extraordinary Resolution

A resolution proposed at a meeting of unitholders or shareholders and carried if 75% or more of the total number of votes cast for and against the resolution vote in favour of it.