LDI

LDI is an acronym of Liability Driven Investing. The idea is that pension schemes use LDI to match their investments with their long-term pension liabilities. Many went about that by buying leveraged portfolios of government bonds. Famously, in September 2023, the Liz Truss/Kwasi Kwarteng budget crashed the UK government bond market and LDI magnified the problem as panicked pension funds sold their bonds. In the end the Bank of England had to step in to provide liquidity and calm markets.

PKU – phenylketonuria

Phenylketonuria (commonly known as PKU) is a rare but potentially serious inherited disorder. Our bodies break down the protein in foods, such as meat and fish, into amino acids, which are the “building blocks” of protein. These amino acids are then used to make our own proteins. Any amino acids that are not needed are broken down […]

Greenfield and brownfield sites

A greenfield development site is one that has not been built upon previously. It is often agricultural land but it can be undeveloped land in a city or rural location. Greenfield sites offer developers a blank canvas and tend to be cheaper to develop versus brownfield sites, as nothing has been built on them previously. However, […]

Modified Dietz

The Modified Dietz method is a way to measure a portfolio’s historical (or ex-post) return. The result of the calculation is expressed as a percentage return over the holding period. Modified Dietz is considered to be an accurate reflection of an individual’s personal rate of return from holding an investment and is sometimes referred to as the modified […]

Active share

Active share is a measure of active risk. In other words it is a measure of how different a portfolio is from a benchmark. It is calculated by working out the difference in the percentage holding in each stock in a portfolio and its equivalent percentage weight in a benchmark. Summing the absolute differences (in […]

Real Estate Investment Trust or REIT

Real Estate Investment Trust or REIT – A REIT is a listed property company in a tax efficient structure: REITs must pay out 90% of their property income to shareholders every year. REITs must be primarily engaged in property investment, rather than in development or other non-property related activities. As REITs are all listed property […]

Currency movement

Currency movement – Often, in reports, companies and investment managers will give the reason for performance to to be the strengthening or weakening of one currency against another. Currency movements (unless hedged) can have a significant impact on the performance of a portfolio. Taken from the point of view of a UK based investor who […]

Participation notes

Participation notes are a form of derivative, issued by a counterparty such as a bank or a broker, which give an investor the same exposure as buying the underlying security would. For example, for an investor who isn’t allowed to hold shares in an Indian company directly, a bank or a broker can create a […]

CDS

CDS is an abbreviation of credit default swap. In a credit default swap, the buyer of the CDS is looking for insurance that the borrower/issuer of the debt that the CDS relates to is not going to default. The seller of the CDS makes payments to the buyer over the life of the swap – […]

expansion capital

Expansion capital is funding for companies that want to grow, by selling in a new location, for example, or building a new factory.

DDA

DDA is an abbreviation for the Disability Discrimination Act. For buildings that are used to provide a service or employment, the Disability Discrimination Act 2005 gives disabled people important rights of access to everyday services. Everyday services include services provided by local councils, doctors’ surgeries, hotels, banks, pubs, theatres, hairdressers, places of worship, courts, voluntary […]

Glossary

LDI