Glossary of Investments and Banking Terms
Search through definitions of terms used throughout this site, by selecting the first letter of the word you are looking for.
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | R | S | T | U | W | Z
A
American Depositary Receipts: Certificates issued by US Banks that hold actual shares of a company's stock. Instead of investing in stock directly you could buy one of these certificates.
Asset classes: Groups of investment types that share similarities. The main asset classes are shares, bonds, cash, property and commodities.
Asset class categories: Each asset class investment can be broken down geographically, by industry, or size of company for example.
Accrued Interest: Total interest accrued from the date of the investment until now.
Achieved Goal: A goal is in Achieved status when the Current Value of the Goal is equal to or greater than the Target Amount defined as part of the goal.
Archived Goal: A goal can be archived when it is in Achieved status. Any holdings associated with the goal will be de-assigned and will be available to be assigned to other goals.
Asset Allocation Index (AAI): As a component of the Citigold Diversification Index, AAI measures the level deviation of a client's investment portfolio in relation to the asset class allocation in Citi's recommended model portfolio.
Assumed rate of return for the goal: Assumed annualized rate of return of the portfolio allocated to the goal. It is based on the assumed returns of the asset classes comprising the portfolio.
Available Balance: Difference between the approved credit line amount and the amount utilized.
Average Unit Price (AUC): Average unit price excluding transaction charges.
Average Weighted Price (Customer Amount): Average unit price considering transaction charges. For bond holdings, AUC also includes accrued interest paid during purchase.
B
Bond funds: Pooled Investments that buy bonds rather than buying shares.
Bonds: An investment where you lend money to a company or institution and they promise to repay that debt. Sometimes they offer fixed rates of interest (known as the coupon) to be repaid at an agreed time, in addition to the original sum (known as the principal). However, there is a wide range of bonds and some come with variable rates of interest and no maturity date.
Base Instrument: The underlying instrument or asset as part of Equity linked accounts/notes or Market linked notes.
Blended Rate of Return (ROR): Assumed annualized rate of return of the portfolio allocated to the goal. It is based on the assumed returns of the asset classes comprising the portfolio.
C
Capital growth: An increase in the market value of an asset, such as a share or property for example.
Channel Islands: A group of islands in the English Channel including Jersey, Guernsey, Alderney, Sark and Herm.
CHAPS funds transfers: Available to our UK and Jersey clients, CHAPS (Clearing House Automated Payment System) transfers can be made within the UK and offer same day guaranteed payment. A fee is usually charged.
Commodities: A product that is the same throughout the world such as oil, gold, coffee beans or rice. Because they have a value they can be traded.
Convertible bond: A bond issued by a company that can be converted into shares of that company in the future.
Corporate bond: A bond issued by a corporation or company.
Correspondent bank (also known as clearing bank): A bank which operates and does business on behalf of foreign banks.
Coupon: The interest payable on a bond. A bond with a 4% coupon, for example, pays 4% interest.
Credit rating: The credit worthiness of a company or person. The higher the rating the financially stronger they are deemed to be.
Creditor: A person or company that is owed money or services from another person or company.
CCY: Currency
Citigold Diversification Index (CDI): Comprised of Asset Allocation Index (AAI) and Product Holdings Index (PHI). AAI measures the level deviation of the client's current investment portfolio in relation to the asset class allocation in Citi's recommended model portfolio. The higher the value of AAI, the more diversified is the portfolio for the relevant investor risk profile. PHI measures the level of product concentration in the investment portfolio. The higher the PHI is, the better diversified the portfolio is. CDI does not cover all types of concentration risk, including but not limited to issuer and currency concentration.
Collateral Flag: Indicates whether the account/asset has been pledged as a collateral.
CPN Received: Coupon received.
Credit Line: The approved loan amount for the customer.
Current Value: The value of investment holdings computed based on the last available prices and/or the current valances of deposits. Current value of bonds also includes accrued interest.
Current Value of Goal: Total value of the portfolio allocated to the goal based on last available prices of the investment holdings (only incl. settled transactions) and the current balances of deposits.
Customer Amount: Customer Amount is the amount debited from customer's account for purchase of a fund/security and this includes Amount Invested in the Fund/Security plus any charges and/or commissions as part of the transaction.
Customer Demographics and Profiling Summary: This page summarises your risk profile for investing, which we have previously discussed with you [as part of the onboarding process]. It also contains a description of a model portfolio which would meet your risk profile. It does not set out what is in your current holdings.
D
Derivatives: A financial contract or agreement that is based on the underlying value of a separate asset. For example a contract for the right to buy gold at a set price in the future is a derivative. You are not buying the underlying asset (the gold), but the right to buy it. And you can trade that right, or option.
Domicile: The country you are from.
Double tax treaties: Agreements between countries to prevent double taxation if you earn money in countries other than the country you are resident in for tax purposes.
Dynamic Currency Conversion (DCC): Some ATMs and retailers abroad (including shops and restaurants) offer a service called Dynamic Currency Conversion. This means that, when paying by card, you are given the option to pay in the local currency or having the transaction converted into your home currency then and there by the shop or restaurant. If you choose to pay in the local currency, your account will be debited using the exchange rate offered by your card company. If you choose to pay in your home currency, the retailer will set the exchange rate. Paying in local currency can be useful for knowing exactly how much will appear on your statement.
However, you should be aware that exchange rate used by the retailer may not be as competitive as the rate offered by your card company. If you are in any doubt, ask to pay the bill in the local currency. Remember to keep your receipts and check against your statement once you return to the UK.
Deal Now: Deal Now allows the user to Buy, Sell or Switch the products like Mutual Funds, Bonds, Structured Notes, Equities etc without any consultation. This functionality is totally independent of any other consultation module in TWA. For additional details on the products selected, refer to the factsheet or product documentation.
Debt to Assets Ratio: Indicator of financial leverage. It tells the percentage of total assets that were financed by creditors, liabilities, debt. The debt to total assets ratio is calculated by dividing total liabilities by its total assets.
Deleted Goal: This page displays the details of the mentioned goal which was deleted during the time period for which the report has been generated.
Dividend/Coupon Received: Total of dividends and coupons received till date from all current investment holdings assigned to the goal since inception.
E
Emerging markets: Countries on the transition from developing to developed, such as China, Argentina, and Pakistan.
Equities: Equities offer a way of investing directly in companies by literally buying one or more shares in that business.
Exchange-Traded Funds: Pooled investment vehicles that track stock market indices – such as the FTSE 100 for example. Exchange-Traded Funds are traded on stock exchanges in the same way as individual stocks.
Expatriate: A person temporarily or permanently residing (living) in a country other than the one in which they were raised or have legal residence.
Education Inflation: This is calculated by a third party company based on the currently available economic data and is made available to Citi.
F
Faster Payments: (FPS) is a UK banking initiative to reduce payment times between different UK banks' customer accounts from three working days using the long-established BACS system, to a few hours.
Fixed coupon bonds: A bond with a fixed or set rate of interest.
Floating rate bonds (also known as floating rate notes): Bonds with an interest rate that is variable and often tracks a variable rate, like the London Inter-bank Offered Rate (LIBOR), at an agreed margin. LIBOR is a variable rate that reflects the interest rates that banks charge each other.
FX: Foreign Exchange
Face Value: Face value is the nominal value of a security stated by the issuer. For stocks, it is the original cost of the stock shown on the certificate. For bonds and other fixed income products, it is the amount paid to the holder at maturity. It is also known as "par value".
FX: Foreign Exchange Rates.
G
Gilts: Government bonds (not including emerging market government bonds).
Global Depository Receipts: Certificates issued by a depository bank which buys shares in foreign companies. They allow you to benefit from the movement of share values of companies in developing countries for example, without having to purchase the stock directly.
Government bonds: An investment where you lend money to a government and they promise to repay that debt at a fixed rate of interest (known as the coupon) to be repaid at an agreed time in addition to the original sum (known as the principal).
Goal Session Summary: This page displays the details of all the goals that you have, and also the status of each goal during the date on for which the report has been generated.
Goals: Goals module will help the customer to create goal
H
Hedge funds: An investment fund open to wealthy investors that often uses hedging methods such as short-selling to either protect against losses, or in fact to increase risk and therefore increase potential return. Hedge funds are only suitable for sophisticated investors.
I
Indices: Plural of index. A stock market index is a way of measuring a section of the stock market.
Inheritance tax: Taxes or duties that arise on the death of an individual, payable out of their estate or by their beneficiaries.
International brokerage: A facility that allows you to access equities, such as shares, and bonds across the world on different stock markets.
Investment Fund: also known as a Mutual Fund or collective investment schemes: A pooled investment that invests widely across securities and therefore spreads risk. Funds can invest in a particular sector, geographical area, risk weighting or asset class and they provide an easy way for investors to access the markets, while minimising risk exposure and trading costs.
ISA: (only for UK customers ) an individual savings account, a scheme allowing individuals to hold cash, shares, and unit trusts free of tax on dividends, interest, and capital gains; Citi UK offers UK residents a Stocks and Shares ISA (not Cash ISAs).
Ideal Value: Indicative portfolio value that has been assumed to be required as of today to meet the goal Target Value by the defined goal target date, considering the assumed rate of return of the portfolio and the regular savings plans.
Indicative Price: Last available market price of the product as of the evaluation end date.
Interest at Maturity: The interest rate at the maturity of deposit products, expressed in percentage paid by financial institutions to deposit account holders.
Interest Earned: Interest already credited and part of the cash account.
Interest Rate: The interest rate, expressed in percentage paid by financial institutions to deposit account holders, OR Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
Interest Rate %: The interest rate charged by Citi for utilizing the funds available in the Overdraft account.
Internal Rate of Return: Assumed annualized rate of return of the portfolio. It is based on the assumed returns of the asset classes comprising the portfolio.
Investment Amount: Investment Amount is the amount that the customer paid for investments excluding commissions and sales charges paid for the investment.
Investment Transactions: This page displays the list of transactions placed during the time period that was selected during the report generation.
Investments Portfolio Comparison: This page summarizes the details of your current portfolio composition in comparison with the model portfolio that meets your Risk profile. It also displays the Citigold Diversification Index pertaining to your Asset Allocation and Product Holding Indexes. For further details refer to the Glossary section.
J
Jurisdiction: A nation, state or country.
K
KIID: A Key Investor Information Document (KIID) is a document which must be provided to anyone who invests in a fund which comes under the EU’s regulatory directive, UCITS IV. These are funds such as OEICS or Unit Trusts which are held directly in an ISA or Collective Investment Account, but not funds which are held in bonds or pensions. The KIID is produced by the fund manager, not Citi, and shows you details of the fund you are thinking of investing in.
KIKO Barrier: Knock-In Knock-Out Barrier. A barrier option is a type of contract in which the payoff depends on the underlying security's price and whether it hits a certain price within a specified period.
Knowledge and Experience: Indicates the product categories in which the customer has declared that he/she has Knowledge and/or Experience. Based on this, customer will be allowed/not allowed to place transactions for the product categories.
L
Liquidity: The quality of a business that enables it to meet its payment obligations, in terms of possessing enough liquid assets (such as cash).
Line Utilized: Utilized amount from the total approved loan amount.
Living inflation: This is calculated by a third party company based on the currently available economic data and is made available to Citi.
Loan Current Value: Current value of the loan taken, after considering the % of interest charged and also the repayments made till date as part of principal and interest.
Lump Sum Contribution: Total amount discussed with the customer to be allocated as an initial investment towards a specific goal during goal planning.
M
Maturity: The final date of an investment or savings term. The maturity date of a three month Time Deposit for example is three months after it has been opened.
Money Market Funds: Mutual Funds that invest in low-risk, short-term debts such as deposits and commercial papers.
Multi Currency: More than one currency. This can apply to an account that you are able to manage in a range of different currencies.
Mutual Funds: (also known as investment funds, collective investment schemes): A pooled investment that invests widely across securities and therefore spreads risk. Funds can invest in a particular sector, geographical area, risk weighting or asset class and they provide an easy way for investors to access the markets, while minimising risk exposure and trading costs.
Margin Erosion of Facility %: 1 – [ (Sum of the market values of pledged collaterals for the loan – Loan amount) / (Sum of the market values of pledged collaterals for the loan – Sum of the security values of pledged collaterals for the loan) ].
Maturity Date: Maturity date is the date on which the principal amount of a note, draft or another debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date subsequent to which an installment loan must be paid in full.
Maximum Allowed Risk: The maximum allowed portfolio risk for customer's portfolio quantified for the Investor Rating selected by the customer based on his Risk Profiling information.
Modified Goal: This page displays the details of the mentioned goal whose details were modified during the time period for which the report has been generated.
N
NAV: Net asset value (NAV) represents a fund's per share market value. This is the price at which investors buy ("bid price") fund shares from a fund company and sell them ("redemption price") to a fund company. It is derived by dividing the total value of all the cash and securities in a fund's portfolio, less any liabilities, by the number of shares outstanding. An NAV computation is undertaken once at the end of each trading day based on the closing market prices of the portfolio's securities.
Non-advisory (also known as execution only): Without advice. If you buy a product on a non-advisory basis you do not take advice but the product is arranged and sold to you, based on your specific instructions. Buying products or investing on a non-advisory basis is only suitable for sophisticated investors.
NAV (Net Asset Value): Value per unit or share of a mutual fund or an exchange-traded fund (ETF) on a specific date or time. With both security types, the per-share dollar amount of the fund is based on the total value of all the securities in its portfolio, any liabilities the fund has and the number of fund shares outstanding.
New Goals: This page displays the details of the mentioned goal which was created during the time period for which the report has been generated.
O
Offshore: Situated or registered abroad. Or banking in another country or jurisdiction to either your residence (where you live) or your domicile (where you are from, pay tax or have permanent residence).
Ongoing contribution: The periodic and/or regular contribution discussed with the customer to be allocated towards a specific goal during the goal planning.
Outstanding Balance: Principal balance of the loan at the moment of the issuance of your TWA statement.
P
Perpetual bonds: A perpetual bond is a bond that doesn't have a maturity date. Because of this they are treated as an equity, not a debt and they pay coupons or interest ongoing.
Pooled investment (also known as collective investment, investment fund): A method of investing where your money is pooled with that of other investors and managed to create growth, income or both. Because your money is pooled you save on transaction costs and can invest in a wider range of shares or other investments than if you invested directly alone. A Mutual Fund is a pooled investment.
Portfolio: A collection of investments held by a person, company or other institution. Your portfolio is made up of all the different assets and investments you own.
Preferred shares: A type of share which is issued over a fixed period of time with an agreed rate of interest. Holders of preferred shares have priority over standard shareholders for payment of dividends, but they have no voting rights (holders of ordinary shares can vote at Annual General Meetings).
Principal: The initial amount you deposited in a savings or investment plan.
Principal-protected investment (also known as structured investment, Structured Note): An investment that protects the initial principal invested and usually offers either a set rate of interest on top, or the chance to benefit from stock market or investment growth.
Private Investment Companies (PICs): A Private Investment Company (PIC) is a corporation established to hold your investment assets. You own the PIC, but it has a separate legal identity that provides many wealth protection benefits.
Portfolio Performance: Portfolio Performance is the performance of customer's holdings over the selected period for which the report has been generated.
Portfolio Risk: The current portfolio risk for customer's portfolio quantified by the WAARR method (Weighted Average Adjusted Risk Rating).
Portfolio Time Horizon: The maximum time horizon customer has selected as part of his Profiling information, which is applicable for all investments and goals.
Positions Assigned: The following holdings are assigned to the mentioned goal during the time period for which the report has been generated.
Positions Deassigned: The following holdings are de
Product Holding Index (PHI): As a component of the Citigold Diversification Index, PHI measures the level of product concentration in the investment portfolio. The higher the PHI is, the better diversified the portfolio is.
Product Risk Rating: Citi's internal risk rating assigned to products which indicates the level of relative risk associated with the product. Product Risk Rating levels range from 1 to 6, where risk rating 1 is assigned to the most conservative products and 6 assigned to the most aggressive products.
Projected Amount / Value: Indicative future value of the goal portfolio as of the goal target date, based on current asset allocation, assumed rate of return of the asset classes comprising the portfolio and the indicated future investment. Projections are made from current date till the target date based on the goal parameters Current Value, Topup Amount, RSP's assigned, Current Date, Goal End Date, and Blended Rate of Return of the underlying investments. Based on these values, Future Value is projected. Total investments planned is projected forward month by month by using the Rate of Return.
Projected Shortfall: Difference between Projected Amount and Target Amount of a goal as expected on the target date of the goal.
Purchase Value: The original amount spent on buying the current portfolio holdings, including any fees. It is calculated as number of units multiplied with the Average Unit Cost (AUC) inc. charges. AUC incl. charges includes accrued interest paid for bonds during purchase as well as transaction charges for all products.
R
Residence: The country in which you are currently living.
Risk-averse: Against risk. A 'risk-averse' investor is very cautious.
Roll-over rates: A rate you move onto on maturity of another account. For example on maturity of a Time Deposit, clients can roll-over their money into another Time Deposit and access our 'roll-over' rates.
Realized Gain/Loss: Sum of gain/loss from sell, switch, maturity & call transactions during the period.
Realized Gain/Loss (Interest Earned): Sum of gain/loss from sell, switch, maturity & call transactions during the period including the accrued interest paid out to the account.
Realized Gain/Loss CCY: Sum of gain/loss from sell, switch, maturity & call transactions during the period in the product currency.
Rebalancing: Rebalancing module is used to facilitate all those customers who want to align their existing portfolio against the benchmark or model portfolio. Based on an inbuilt solver algorithm, TWA system will provide the recommendations based on the model portfolio of the customer".
Rebalancing Transactions: The following transactions are based on the system recommendations as part of the Rebalancing module, and you have confirmed the below transactions to be executed".
Reference Price: Last available market price of the product as of the evaluation end date.
Reference Value: The value of the investment holdings computed based on the last available prices and/or the current balances of deposits. Current value of bonds also includes accrued interest.
Relationship Type: Customer's relationship type with the bank based on the type of profiling. The various relationship types are Recommended, Trading, and Refused for Full Profile, K&E Only Profile, and Refused Profile respectively.
Risk Level of Goal: Risk Rating assigned to the goal portfolio. Risk level carries the same scale as Investor Rating ranging from IR1 to IR6, where “IR1” indicates low risk and “IR6” indicates high risk.
RSP: Regular Savings Plan transaction type for Mutual Funds. Customer will be able to invest a fixed pre-defined amount at a predefined frequency in the selected fund for the time period selected during the RSP set-up.
S
Self-cert mortgage: A mortgage where the borrower states their income and this is not verified by the lender. You certify your earnings and the lender does not ask for proof.
SEPA funds transfers: enable you to transfer money in Euro securely, easily and free of charge to any other account within SEPA (the Single European Payment Area). Funds usually clear within three days and are available across over 30 European countries. Not available via Jersey branch.
Shares: Also known as equities. They offer a way of investing directly in companies by literally buying one or more shares in that business. You buy your shares and receive returns in the form of a dividend which the company may choose to pay – often annually, but it can be more or less frequently. In addition, the value of your shares may increase or fall depending on the underlying value of the company.
Structured Notes: An investment product that can protect your principal and give you access to stock market growth. A Sturctured Note combines two elements: a low risk bond (that protects your principal) makes up most of the investment (typically 80%), and the rest of your money is put into a higher risk investment like equities or derivatives which offer the potential for high growth.
SWIFT funds transfers: SWIFT Funds Transfers allow you to transfer money to most countries in most currencies. SWIFT Funds Transfers are wire transfers that usually clear within 1-5 working days.
Spot Rate: The price quoted for immediate settlement on a commodity, a security or a currency. The spot rate, also called “spot price,” is based on the value of an asset at the moment of the quote.
Strike Price: Strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.
Strike Rate: Strike rate (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.
T
Time Deposits: A low risk short-term savings option giving you attractive returns with no risk to your capital.
Trusts: A way to hold your assets without holding legal title to them. It is a confidential arrangement where a trustee holds legal title to your assets and manages the Trust under exact terms specified by you.
Target Amount / Value: Targeted goal portfolio value to be achieved for a specific goal by the goal target date.
Tenor: Time period till maturity of the product.
Top-ups made-to-date: Total Value of investments purchased and allocated towards a specific goal since inception of the goal. This includes buy transactions which are in progress (i.e. initiated but not settled yet).
Total CSV: Citibank Security Value, also known as Collateral Marginable Value.
Total Gain/Loss: Sum of Realized Gain/Loss in the period and Unrealised Gain/Loss as of the evaluation end-date. Includes cash dividends/coupons received during the period. Total Gain/Loss is for the particular time period for which the customer holds the investments.
U
Unrealised Gain/Loss %: Difference between Current Value and Average Unit Cost of the individual portfolio holding in %.
Unrealised Gain/Loss (Interest Accrued): Difference between the Current Value and Average Unit Cost of the current portfolio holdings, and includes the interest accrued thus far, but not yet paid out.
Unrealised Gain/Loss CCY: Difference between Current Value and Average Unit Cost of the individual portfolio holding in the respective product currency
W
Warrants: A security that entitles the holder to buy stock of the company that issued it at a specified price, which is usually higher than the stock price at the time of issue.
Wealth Management: Growing, protecting and managing your wealth can require a long-term strategy. Our investment experts help you build such a strategy, helping you achieve your financial goals.
Wealth structuring: Protecting your wealth, both in terms of planning your inheritance and protecting your wealth outside your home country. Typical wealth structuring strategies include opening a Private Investment Company or Trust to ensure your financial matters are private and safe, and work exactly to your instructions.
Weighted QOF %: Sum of the security values of pledged collaterals for the loan / sum of the market values of the pledged collaterals for the loan.
Withdrawals made-to-date: Total value of holdings sold or un-allocated from a specific goal since inception date of the goal.
Z
Zero coupon bonds (also known as discount bonds): A zero coupon bond is bought at a price lower than its face value, and the face value is repaid on maturity. It does not pay a coupon (interest).
% of Total Portfolio: Proportion of customer's portfolio allocated towards a specific goal, in %. Customer's total portfolio at Citibank is calculated as the total sum of current value of all investment holdings based on last available market prices (i.e. "Reference Price") and the total sum of all deposits. Insurances and Loans are not included.