Jargon Buster

M

Managed exit
The point at which management and other investors enjoy a return on their investment, by selling the business either on the stock market, to a competitor, or to another institution such as a VCT. A Managed exit will be initiated according to a careful strategic plan which is often compiled with professional advice.

Management Accounts
Accounts which are prepared for use when managing the business.

Market Capitalisation
The value of a company measured by the total stock market price of its shares, calculated by multiplying the number of shares by the current market price of a share.

Micropal Star Ratings
Micropal is an independent Mutual Fund analyst which monitors all the UK's unit trust and OEICs and awards stars on a scale of 0-5, with the highest scores being awarded to the best performing funds.

Monetary Policy
Influencing an economy through control of the money supply.

Money Purchase Scheme
Also known as Defined Contribution Scheme. A scheme where the amount of a member's retirement benefits depends on the contributions paid into the scheme in respect of the member. The rate of the contributions is decided by the employer.

Mutual company
A company which has no shareholders but is owned instead by its with-profits policyholders.

Mutual Fund
An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets in accordance with a stated set of objectives. Shares are issued and redeemed on demand.

N

NASDAQ
Index of the leading technology stocks in the USA.

National Insurance
Payments made out of earnings by employees, employers and the self-employed to the Government that entitle you to a state pension and other benefits.

National Insurance Rebate
The amount by which employers' and employees' National Insurance contributions are reduced for employees who are contracted out of SERPS by virtue of membership of an occupational pension scheme. Alternatively, it is the payment made by the Department of Social Security as minimum contributions to a personal pension scheme.

Negative Equity
This is when the market value of your house is less than the amount outstanding on your mortgage.

Net Yield
The return on an investment after tax has been deducted.

O

Occupational Pension Scheme
A legal contract set up by an employer to provide pensions and/or other benefits for one or more employees on retirement, death or leaving pensionable service.

OEIC - Open Ended Investment Company
Managed funds which hold a portfolio of investments which you can buy into. They issue shares instead of units and normally quote a single price.

Offer Price
The price at which you buy units from a unit trust manager.

Offshore Funds
Funds based outside the UK for tax reasons.

OMO - Open Market Option
Your right at retirement to buy an annuity from a provider other than the one who has administered your pension fund.

OPAS
The Occupational Pensions Advisory Service, voluntary organisation which advises on problems with any type of pension scheme other than state schemes.

OPRA
The Occupational Pensions Regulatory Authority, body with wide ranging powers set up to regulate the occupational pensions industry

Option
In investment terms, a contract giving the right to buy or sell commodities, currencies or shares at a fixed date in the future at a fixed price. In pension terms, the choice of how to take your fund (e.g. lump sum and pension or pension) and the right at retirement to buy an annuity from a provider other than the one who has administered your pension fund.