Exo Glossary

Active investment

Active investment is a portfolio management method that consists of a portfolio manager constantly monitoring the performance of an investment account and regularly trading assets in order to outperform a given market benchmark.

Asset

Assets are elements of financial value that constitute the global wealth of an individual or a company. Assets can be cash, stocks or properties for instance.

Alternatives

Alternatives are assets whose performances are usually not correlated with those of classic investments (i.e. cash, bonds and stocks). Commodities, gold and real estate are examples of alternatives.

Behavioural bias

Behavioural biases are filters that have an impact on the way people make decisions. When investing, behavioural biases like personal judgements and emotions can prevent investors from making rational decisions.

Bid-ask spread

The bid-ask spread represents the difference between the lowest price a seller expects for an asset and the highest price a buyer is offering for it. This ratio is often used to assess the liquidity of an asset in the market.

Bonds

Bonds are debt securities issued by companies or national governments. The issuer of the bond borrows money from investors and commits to a date upon which interest will be paid, in addition to the principal.

Capital gains

A capital gain is the profit an investor makes when selling an asset that had been bought previously for a lower price. In the United Kingdom (UK), capital gains are taxed. Please find professional advice for further information.

Commodity

Commodities are raw materials and primary agricultural products that can be traded on the market. Sugar, wheat, crude oil, gold and beef are common commodities.

Dividend

Dividends represent a portion of a company's earnings that is paid to shareholder. An important ratio for investors is the dividend yield, which is the dividend received in relation to the share price.

ETF

Exchange-Traded Funds (ETFs) are low-cost investments that aim to replicate the performance of a particular index, commodity or asset class - like the FTSE 100, S&P 500, US corporate bonds or gold bullion.

FCA

The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. Retail and wholesale companies need to be authorised by the FCA to operate in the country. Exo Investing's FCA register number is 748161.

FSCS

The Financial Services Compensation Scheme (FSCS) is an organisation which protects UK consumer when authorised financial services companies fail. Exo Investing's custodian Winterflood is a member of the FSCS.

Fund charges

Funds charges, also called total expense ratios (TER), are the management costs incurred by a fund provider. These costs have an impact on the return of an investment as they are deducted at source.

GDPR

The General Data Protection Regulation (GDPR) is the European Union (EU) reform that aims to harmonise data privacy laws across Europe and increase the protection of EU citizens' personal information.

GIA

General Investment Accounts (GIAs) offer the opportunity to UK residents to invest their money in stocks and shares portfolios. GIAs don't have any deposit limit but are subject to taxes on dividends and capital gains.

Inflation

The rate at which prices of goods and services increase over a certain period of time.

Investment focus

Investment focus refers to the preferences of an investors regarding the assets included in his/her portfolio. Your prefered asset categories are taken into account by Exo Investing when creating your unique portfolio.

ISA

Individual Savings Accounts (ISAs) allow UK residents to invest money without paying taxes on cash interest or on income and capital gains. In the 2018/2019 tax year, you can save up to £20,000 in total in your different ISAs.

Liquidity

Assets are considered liquid when they can be bought and sold quickly at a relatively stable price. Cash is known as the most liquid asset while collectible items and real estate are rather illiquid.

MiFID

The Markets in Financial Instruments Directive (MiFID) is the legislation that regulates the finance industry in the European Union. This reform aims at making European markets more transparent.

Passive investment

Passive investment strategies, which include ETFs, aim to replicate the risk and return of a designated market index and are typically much cheaper than active funds.

Quantitative analysis

The use of mathematical models and algorithms to analyse a complex situation. For instance, Exo Investing's partner ETS has developed a proven risk management technology based on quantitative analysis for financial markets.

Risk profile

The evaluation of your personal situation in order to assess your understanding of risk when investing, your capacity to tolerate losses and your willingness to take risks with your money.

Robo-advisors

Digital platforms that use mathematical and statistical models to allocate assets to an investor's portfolio.

Securities

Securities are financial instruments that can be traded on a market, such as bonds and stocks.

SIPP

Self-Invested Personal Pensions (SIPPs) allow UK residents to save money for their retirement. SIPPs come with several benefits such as tax relief on contributions and exemption of taxes on income and capital gains.

Stocks

Stocks are securities that represent ownership of a company. An investor who holds stocks of a company is called a shareholder and has a right over part of the company's earnings.

Volatility

Volatility is the change in value of a given security or market index. In other words, volatility represents the potential risk and return associated with an investment.