Individual Savings Account (ISA) An ISA is a tax-efficient savings or investment account available to UK residents. ISAs allow individuals to save or invest up to a set annual limit without paying tax on income or capital gains. Popular types include Cash ISAs, Stocks and Shares ISAs, and Innovative Finance ISAs.
Index-Linked Gilt Index-linked gilts are UK government bonds whose interest payments and principal repayment are adjusted for inflation. These are attractive to investors seeking protection against inflation while receiving steady returns.
Initial Public Offering (IPO) An IPO is the process through which a private company offers its shares to the public for the first time. In the UK, IPOs are conducted on the London Stock Exchange, providing companies with capital for growth and giving investors new opportunities for equity ownership.
Income Fund An income fund is a mutual fund or investment trust designed to provide regular income, primarily from dividends or interest. In the UK, income funds are popular among retirees and income-focused investors seeking consistent cash flow.
Investment Trust An investment trust is a closed-ended fund listed on the London Stock Exchange. It pools money from investors to invest in a diversified portfolio of assets. In the UK, investment trusts are favoured for their flexibility, leverage options, and long-term growth potential.
Index Fund An index fund is a type of mutual fund or ETF designed to track the performance of a specific market index, such as the FTSE 100. In the UK, index funds provide low-cost, diversified exposure to various sectors and are ideal for passive investors.
Interest Rate Risk Interest rate risk refers to the potential loss due to fluctuations in interest rates. In the UK, this risk affects bonds and fixed-income investments, with rising rates typically causing bond prices to fall.
Infrastructure Investment Infrastructure investment involves funding large-scale projects like transport, energy, or telecommunications. In the UK, these projects are often backed by public-private partnerships, offering long-term stable returns for institutional and retail investors.
Income Drawdown Income drawdown is a method of withdrawing money from a pension pot while keeping the remaining funds invested. In the UK, this approach is popular for providing retirement income while allowing for potential capital growth.
Intrinsic Value Intrinsic value represents the true worth of an asset based on its fundamentals, such as earnings, dividends, and growth potential. In the UK, value investors use intrinsic value to identify undervalued stocks for long-term gains.
Impact Investing Impact investing involves allocating capital to projects or companies that aim to generate positive social or environmental outcomes alongside financial returns. In the UK, impact investing is growing in popularity, particularly in renewable energy and social housing sectors.
Interest Cover Ratio The interest cover ratio measures a company’s ability to meet its interest obligations with its earnings. In the UK, this ratio is crucial for assessing the financial health of companies with significant debt.
International Securities Identification Number (ISIN) An ISIN is a unique identifier for financial securities, such as stocks and bonds. In the UK, ISINs are used to standardise identification across exchanges and ensure clarity in trading and settlement processes.
Income Protection Insurance Income protection insurance provides a regular income if an individual is unable to work due to illness or injury. In the UK, this product is essential for individuals seeking financial security and peace of mind.
Investment Grade Bonds Investment grade bonds are debt securities with a credit rating of BBB- or higher. In the UK, these bonds are considered lower-risk investments and are commonly issued by blue-chip companies and the government.
Insolvency Risk Insolvency risk refers to the likelihood of a company being unable to meet its financial obligations. In the UK, investors monitor insolvency risk when evaluating corporate bonds, shares, or private equity investments.
Inflation-Adjusted Return Inflation-adjusted return measures the real return on an investment after accounting for inflation. In the UK, this metric is vital for assessing the purchasing power of investment returns, especially for long-term goals.
Investment Club An investment club is a group of individuals pooling money to invest collectively, often in stocks or real estate. In the UK, investment clubs are popular among retail investors looking to share knowledge and diversify their portfolios.
Index Arbitrage Index arbitrage is a trading strategy that exploits price discrepancies between index futures and the underlying index. In the UK, this strategy is commonly used by institutional investors on indices like the FTSE 100.
Interest Rate Swap An interest rate swap is a derivative contract in which two parties exchange interest payments. In the UK, these swaps are used by businesses and investors to hedge against interest rate fluctuations or achieve more favourable borrowing terms.
Innovative Finance ISA (IFISA) An IFISA is a type of Individual Savings Account that allows investments in peer-to-peer loans. In the UK, IFISAs offer attractive tax-free returns for investors willing to accept the higher risks associated with lending to individuals or small businesses.
Initial Margin The initial margin is the minimum amount of collateral required to enter a leveraged trading position. In the UK, brokers and clearinghouses set margin requirements for derivatives and futures contracts to manage risk.
In The Money (ITM) An options contract is “in the money” when it has intrinsic value. For example, a call option is ITM if the underlying asset’s price exceeds the strike price. In the UK, ITM options are favoured by traders looking to exercise contracts for profit.
Income Statement An income statement is a financial report showing a company’s revenues, expenses, and profits over a specific period. In the UK, investors use income statements to assess a company’s financial performance and profitability trends.
Impact Bond An impact bond is a debt instrument used to finance projects with social or environmental benefits. In the UK, impact bonds are increasingly used for funding initiatives like affordable housing, renewable energy, and education.
Insider Trading Insider trading refers to buying or selling securities based on non-public, material information. In the UK, this practice is illegal and strictly regulated by the Financial Conduct Authority (FCA) to ensure market integrity and fairness.
Initial Coin Offering (ICO) An ICO is a fundraising method where companies issue digital tokens in exchange for capital. In the UK, ICOs are scrutinised by regulators to protect investors from fraud and ensure compliance with financial laws.
Income Portfolio An income portfolio is designed to generate regular cash flow through dividends, interest, or other income-producing assets. In the UK, this strategy is popular among retirees and investors seeking consistent returns.
Indexation Indexation is the adjustment of investment values based on an index, often to account for inflation. In the UK, tax systems previously used indexation to adjust gains for inflation, although this has been phased out for most investments.
Investment Manager An investment manager is a professional responsible for managing assets on behalf of clients or funds. In the UK, investment managers are regulated by the FCA, ensuring adherence to standards and client protection.
Insolvency Practitioner An insolvency practitioner is a licensed professional who manages the process of company insolvency or individual bankruptcy. In the UK, these practitioners play a vital role in restructuring, administration, and liquidation proceedings.
Impact Measurement Impact measurement assesses the social or environmental outcomes of investments. In the UK, this practice is common in ESG and impact investing, ensuring that investments align with ethical and sustainability goals.
Inflation Risk Inflation risk is the potential loss of purchasing power due to rising prices. In the UK, investments like index-linked gilts or real assets are used to mitigate this risk, ensuring real returns over time.
Investment Strategy An investment strategy is a plan to allocate assets in a portfolio to achieve specific financial goals. In the UK, strategies range from growth and value investing to income-focused and ESG approaches, tailored to individual investor preferences.
Intangible Assets Intangible assets are non-physical resources, such as patents, trademarks, or goodwill, that hold economic value. In the UK, intangible assets are an important factor in company valuations, particularly in sectors like technology and pharmaceuticals.
Income Tax Relief Income tax relief reduces the amount of tax payable on earnings. In the UK, schemes like the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) offer income tax relief to investors supporting early-stage businesses.
Index Rebalancing Index rebalancing involves adjusting the components of an index to reflect changes in market conditions or company performance. In the UK, indices like the FTSE 100 periodically rebalance to ensure they accurately represent the market.
Investment Horizon Investment horizon refers to the length of time an investor expects to hold an asset or portfolio. In the UK, this can range from short-term trading to decades-long retirement planning, influencing risk tolerance and asset allocation.
Inflation-Protected Securities These are bonds that adjust payments based on inflation to maintain purchasing power. In the UK, index-linked gilts serve this purpose, appealing to investors concerned about inflation erosion.
Initial Yield Initial yield is the income return on an investment, such as property, expressed as a percentage of the purchase price. In the UK, this metric is widely used in real estate to evaluate potential rental income.
Investor Sentiment Investor sentiment measures the overall attitude of investors toward the market or specific assets. In the UK, sentiment indicators influence market movements, particularly during times of political or economic uncertainty.
Income Distribution Income distribution refers to the payment of earnings, such as dividends or interest, to investors. In the UK, income-focused funds and trusts regularly distribute income, attracting investors seeking cash flow.
Infrastructure Fund An infrastructure fund invests in large-scale public works projects, such as transport or utilities. In the UK, these funds provide long-term, stable returns, often backed by government contracts or regulatory frameworks.
Illiquid Asset Illiquid assets cannot be quickly sold or converted into cash without a significant loss in value. In the UK, examples include private equity, real estate, and art. Investors consider illiquidity risks when diversifying their portfolios.
Interest Accrual Interest accrual is the accumulation of interest on an investment over time. In the UK, fixed-income securities like bonds accrue interest periodically, which is paid to investors on specific dates.
Investment Income Investment income includes earnings from interest, dividends, and capital gains. In the UK, this income is subject to taxation, though tax-efficient accounts like ISAs and pensions offer ways to minimise tax liabilities.
Index Weighting Index weighting determines the proportion of each constituent in an index, often based on market capitalisation. In the UK, indices like the FTSE 100 use free-float market capitalisation weighting to reflect the tradable value of companies.
Inverted Yield Curve An inverted yield curve occurs when short-term interest rates exceed long-term rates, often signalling an economic downturn. In the UK, investors monitor the yield curve closely as an indicator of recession risk.
Institutional Investor Institutional investors are large organisations, such as pension funds, insurance companies, or asset managers, that invest significant sums in financial markets. In the UK, these investors play a key role in market liquidity and stability.
Income Share Class An income share class distributes dividends or interest directly to investors rather than reinvesting them. In the UK, these share classes are popular among income-focused investors seeking regular payouts.
Investment Platform An investment platform is an online service that allows users to buy, sell, and manage investments. In the UK, platforms like Hargreaves Lansdown and Interactive Investor provide access to funds, stocks, and bonds, offering convenience and transparency for retail investors.
Inflation-Linked Bond Inflation-linked bonds are securities that adjust interest payments and principal value based on inflation. In the UK, index-linked gilts are the primary inflation-linked bonds, providing protection against rising prices for income-focused investors.
Incremental Investing Incremental investing involves gradually increasing an investment over time rather than committing a lump sum. In the UK, this strategy is often used in volatile markets to average out entry prices and reduce risk.
Intensive Growth Strategy An intensive growth strategy focuses on increasing sales or market share through new products, market expansion, or enhanced marketing. In the UK, this strategy is popular among companies in competitive sectors like retail and technology.
Investment Grade Credit Investment grade credit refers to bonds rated BBB- or higher, indicating lower default risk. In the UK, these bonds are favoured by conservative investors seeking steady returns with minimal risk.
Income Splitting Income splitting involves dividing income between family members to reduce tax liabilities. In the UK, this strategy can be employed through joint investments or transferring assets to lower-taxed family members, though it must comply with tax regulations.
Implied Volatility Implied volatility is a measure of expected price fluctuations for an asset, derived from options pricing. In the UK, traders use implied volatility to gauge market sentiment and plan strategies for equity and currency options.
Industrial and Provident Society (IPS) An IPS is a UK-based legal structure for co-operatives and community benefit organisations. These entities provide investment opportunities in socially responsible projects, appealing to impact investors.
Investment Vehicle An investment vehicle is a structure or account used to hold and manage investments. In the UK, options include ISAs, Self-Invested Personal Pensions (SIPPs), and trusts, offering varying levels of tax efficiency and flexibility.
Income Bond An income bond is a debt security that pays regular interest but does not guarantee principal repayment. In the UK, income bonds are popular among investors seeking steady income, though they carry higher risk compared to government securities.
Intrinsic Growth Intrinsic growth refers to a company’s ability to grow without external funding, relying solely on reinvested earnings. In the UK, companies with high intrinsic growth are attractive to investors seeking sustainable, long-term returns.
Income Equalisation Income equalisation ensures that all investors in a fund receive a fair share of income, regardless of when they joined. In the UK, this practice is standard in income-focused funds, aligning distributions with investor contributions.
Index Options Index options are derivatives giving the right to buy or sell a market index at a specific price. In the UK, FTSE 100 options are widely used by institutional investors to hedge portfolio risks or speculate on market movements.
International Diversification International diversification involves spreading investments across multiple countries to reduce risk and improve returns. In the UK, investors use global equity funds and ETFs to access international markets and hedge against domestic economic fluctuations.
Interbank Lending Rate The interbank lending rate is the interest rate banks charge each other for short-term loans. In the UK, SONIA (Sterling Overnight Index Average) is the benchmark for such rates, influencing monetary policy and fixed-income investments.
Investment Advisory Service An investment advisory service provides professional guidance on portfolio management and asset allocation. In the UK, these services range from independent financial advisers to robo-advisors, catering to diverse investor needs.
Intensive Margin The intensive margin refers to the additional output or revenue generated from existing resources. In the UK, businesses use this concept to optimise efficiency, while investors assess it to evaluate company performance.
Income ETF An income ETF tracks an index of income-producing securities, such as dividend stocks or bonds. In the UK, income ETFs are popular for their low cost, diversification, and steady income streams.
Inflation Targeting Inflation targeting is a monetary policy framework where central banks aim to keep inflation within a specific range. In the UK, the Bank of England targets 2% inflation, influencing interest rates and market sentiment.
Insolvency Ratio The insolvency ratio measures a company’s ability to meet its long-term obligations with its assets. In the UK, investors use this ratio to assess the financial stability of companies in sectors prone to cyclical downturns.
Investment Management Fee This is the fee charged by fund managers for managing investments. In the UK, these fees are expressed as the Ongoing Charges Figure (OCF) and vary depending on the complexity and type of fund.
Interest Income Interest income refers to earnings from fixed-income securities, savings accounts, or loans. In the UK, this income is subject to taxation, though tax-free allowances and accounts like ISAs can help reduce liabilities.
Income Statement Analysis Income statement analysis evaluates a company’s revenue, expenses, and profitability. In the UK, this analysis helps investors assess operational efficiency and future growth prospects, particularly in cyclical industries like retail and manufacturing.
Investment Performance Investment performance measures the return on an investment relative to its benchmarks or objectives. In the UK, performance is evaluated using metrics like annualised return, risk-adjusted return, and comparison against indices like the FTSE 100.
Index Fund Rotation Index fund rotation involves reallocating investments from one index fund to another based on market trends or economic cycles. In the UK, this strategy helps investors optimise returns by adjusting exposure to different sectors or geographies.
Investment Mandate An investment mandate outlines the rules, objectives, and constraints for managing a portfolio or fund. In the UK, mandates guide asset managers in aligning investments with clients’ goals, risk tolerance, and ethical preferences.
Interest Rate Ceiling An interest rate ceiling is a cap on the maximum interest rate a lender can charge. In the UK, regulations such as those from the Financial Conduct Authority (FCA) limit rates for certain loans, protecting borrowers from excessive charges.
Index Reweighting Index reweighting adjusts the weighting of components in a market index based on new criteria or performance changes. In the UK, indices like the FTSE 100 undergo reweighting to ensure they accurately reflect market dynamics.
Income Property Income property refers to real estate purchased to generate rental income. In the UK, buy-to-let properties are a popular income property investment, offering steady cash flow and potential capital appreciation.
Investment Partnership An investment partnership is a legal structure allowing partners to pool capital for investing. In the UK, these partnerships are often used for private equity, venture capital, and real estate investments, offering flexibility and tax advantages.
Inflation Hedge An inflation hedge protects the purchasing power of investments against rising prices. In the UK, assets like index-linked gilts, gold, and real estate are commonly used to hedge inflation risk.
Initial Coin Offering (ICO) Regulation ICO regulation governs the issuance of digital tokens to ensure transparency and investor protection. In the UK, the FCA monitors ICO activities, requiring firms to comply with anti-money laundering and securities laws.
Industry Analysis Industry analysis evaluates the market dynamics, competition, and profitability of a specific sector. In the UK, investors use this to identify growth opportunities in industries like renewable energy, healthcare, and technology.
Income Annuity An income annuity provides regular payments for life or a fixed term in exchange for a lump sum. In the UK, annuities are a common retirement product, offering guaranteed income and financial stability in later years.
Investment Benchmark An investment benchmark is a standard used to measure the performance of a portfolio or asset. In the UK, benchmarks like the FTSE 100 and FTSE All-Share Index are commonly used to evaluate equity investments.
Interest Rate Differential (IRD) IRD is the difference in interest rates between two countries or financial instruments. In the UK, IRD influences currency exchange rates, particularly for investors and businesses engaged in foreign trade or international investments.
Incremental Capital Output Ratio (ICOR) ICOR measures the efficiency of capital investment in generating economic output. In the UK, this ratio is used to assess productivity and the effectiveness of infrastructure or industrial investments.
Income Unit Trust An income unit trust is a pooled investment vehicle focusing on generating income through dividends, interest, or rent. In the UK, these trusts are popular for retirement planning and income-focused portfolios.
Intangible Investment Intangible investment involves allocating capital to non-physical assets, such as research, software, or intellectual property. In the UK, companies in sectors like technology and pharmaceuticals often make significant intangible investments to drive innovation.
Investment Objective An investment objective defines the financial goals of a portfolio, such as income generation, capital growth, or risk minimisation. In the UK, clear objectives help investors and advisers tailor strategies to meet specific needs.
Interest Rate Collar An interest rate collar is a strategy that limits the range of interest rate fluctuations by combining a cap and a floor. In the UK, businesses and investors use collars to manage borrowing costs and stabilise returns.
Income Allocation Income allocation refers to the distribution of income from investments among various asset classes or accounts. In the UK, tax-efficient allocation strategies involve maximising ISAs and pensions for income-focused investors.
Index Futures Contract An index futures contract is a derivative allowing traders to speculate on the future value of a market index. In the UK, FTSE 100 futures are widely traded, providing opportunities for hedging or leveraging market exposure.
Investment-Linked Insurance Policy These policies combine life insurance with investment elements, where premiums are partly invested in funds. In the UK, such policies offer both protection and growth potential, appealing to long-term planners.
Infrastructure Bond An infrastructure bond funds large-scale public projects like transport, energy, or water facilities. In the UK, these bonds often come with government backing, offering low-risk, stable returns for investors.
Impact Fee An impact fee is charged to developers to offset the costs of public services required by new developments. In the UK, these fees are common in real estate and urban planning, ensuring sustainable infrastructure funding.
Initial Margin Requirement The initial margin requirement is the minimum deposit needed to open a leveraged position in a financial instrument. In the UK, brokers and clearinghouses set margin requirements to manage risks in futures and options trading.
Illiquidity Premium The illiquidity premium is the additional return demanded by investors for holding less liquid assets. In the UK, this premium applies to investments like private equity, real estate, and bespoke bonds.
Income Statement Forecasting Income statement forecasting estimates future revenue, expenses, and profitability. In the UK, analysts use this to value companies, particularly when assessing high-growth sectors like FinTech or e-commerce.
Investment Return Profile An investment return profile shows the expected risk and return characteristics of an asset or portfolio. In the UK, this analysis helps investors balance growth potential with risk tolerance, tailoring strategies to meet individual financial goals.
