Glossary of terms

Annuities
Predetermined regular payments that are given in return for an initial payment.

Beneficiary
The person or company you choose to receive your money after your death.

Debentures
An investment that pays a specified amount of interest each year and repayment of the total amount at maturity.

Diversification
Reducing your risk by spreading investments over a number of different asset classes.

Dividend
A payment from the profits of a company to its shareholders.

Estate

The net value of all your assets and liabilities.

Gearing
Borrowing money to invest.

Inflation
A rise in the general level of prices over time which results in an increase in the cost of living.

Investment trust
A type of managed investment, which is sometimes called a unit trust.

Liquidity
The ability of an investment to be quickly converted into cash.

Managed investment
Your money is pooled with the money of other people. An investment manager takes responsibility for the investment decisions.

Property trust
An investment trust investing in direct property and listed property securities.

Return
The total profit of an investment - includes capital growth and income.

Share trust
An investment trust investing in the New Zealand, Australian and/or international sharemarkets.

Volatility
A measure of the variability of returns.

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