An investment company whose assets are managed by its own team of managers or by the directors of the company, rather than by external fund managers.
Here you’ll find definitions of terms used on the AIC site. Enter the term you want to search for in the box, or click on the letter it begins with.
A part of the share capital of a company.
Describes an investment company buying its own shares and reducing the number of shares in existence.
Share buybacks can be used to return money to shareholders, but are also often used to tackle the company’s discount. Discounts may reflect an imbalance between the demand for shares and the number of shares in existence. The hope is that, by reducing the number of shares in existence, the buyback will help to prevent the discount widening or even reduce it.
The price of a share as determined by the stock market.
The standard measure of performance for an investment company, taking into account the change in share price over a period of time as well as all the dividends paid during that period. It is assumed that the dividends are reinvested at the time the shares are quoted ex dividend.
Share price total return takes into account the change in value of the underlying portfolio of the investment company and any dividends paid, as well as the discount or premium at which the shares trade, and any change in discount or premium over the period.
Contrast this with the NAV total return, which only takes into account the change in value of the underlying portfolio of the investment company and any dividends paid.
See share price, NAV total return and total return.
Another name for net asset value.
A dividend paid in addition to normal regular dividends in circumstances which are unlikely to be repeated in the near future.
The Specialist Fund Segment (SFS) is a part of the London Stock Exchange designed for more sophisticated investment companies and more experienced investors. Investment companies listed on the SFS may be marketed to professional investors only.
If you buy shares in an investment company which is based in the UK, you’ll normally have to pay 0.5% stamp duty on the value of the shares. If you buy shares in a non-UK investment company, you won’t normally have to pay any stamp duty. You don’t have to pay stamp duty on the sale of your shares.
A type of share that investors can convert into new ordinary shares in the company at some time in the future at a fixed price.
Subscription shares have similar characteristics to warrants, including a limited life, but can be held more freely in an ISA. They don’t have the same rights as ordinary shares (e.g. they may not be entitled to any dividends before they are converted into the ordinary shares).
They are also much higher risk than ordinary shares, as you may not want to convert them into new ordinary shares if you can buy these on the stock market more cheaply. Subscription shares can therefore expire worthless and you could lose all the money you paid for them.
