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.

     


T

TESSA

A TESSA (Tax Exempt Special Savings Account) is a five year savings account where the interest is accumulated tax free. TESSAs were replaced by ISAs in April 1999.

Total Expense Ratio (TER)

Cost of investing in a Fund, expressed as a percentage of the value of your investment.

It has now been replaced by the Ongoing Charge Figure (OCF) for all UCITS Funds.

Non-UCITS Retail Scheme (NURS) may still use a TER, which you will find in the simplified prospectus. Like the ongoing charges have the TER is taken from your investment each year to pay for administration investment management, and independent oversight of the Fund. It may also include commission paid to your intermediary.

Total Return

Both the income received and the capital gained on an investment.

Tracker Funds

A Fund that mirrors the progress of a specific index (eg. the FTSE 100) by holding the components of that index.

It aims to “track” the progress of an index, eg. the FTSE 100, by buying and selling Shares in the same proportions as represented on the index or by partially replicating the index.

These are sometimes called index or passively managed Funds.

Trail Commission

Trail Commission is a payment made by investment Fund Providers to an adviser or discount broker in relation to products sold off-platform. A typical investment Fund has an annual management charge of 1.5%. From this an intermediary would be paid on average 0.5% each year, this is called trail commission.

This commission is deducted from an investment along with the other Fund management charges and makes up the Ongoing Charges (OCF).

Trustee

An institution, such as a bank or insurance company, which acts as a custodian of a Unit Trust Fund’s assets on behalf of unit-holders and looks after their interests generally. Trustees must be authorised under the Financial Services Act.