Accumulation units

A unit class that reinvests any income back into the fund instead of paying it out to the investor as income. All T. Bailey funds offer accumulation units.

Accumulation units can be identified by the letters ‘Acc’ following the name of a fund.

Active Management

Active management is a strategy typically referred to when investment managers aim to outperform the market by taking positions to achieve a specific objective or by investing differently to the market references such as indices. Active management involves proactive analysis, research, market forecasts and expert judgement. This means that fees are generally higher than passively managed funds, or index tracker funds which only seek to track the market minus costs.


Alpha is a term that refers to the measurement of a fund’s performance over and above what you would expect from the market as a whole. It is the differential between the market return and the return actually achieved. Alpha is often used as a measure of a fund manager’s skill.

Annual Management Charge (AMC)

The portion of the total cost of owning a fund charged by the fund manager for managing the fund.  This includes such things as asset allocation, fund research and the cost of the investment team.  The AMC is typically expressed as a percentage.

Annualised rate of return

Usually expressed as a percentage rate, the annualised rate of return is the net return over a given period (e.g. 3 years) arranged to show what the ‘straight-line’ returns would have been over that period.

Asset allocation

Asset allocation is the process of deciding in which asset classes (e.g. shares, bonds, cash) to invest and in which proportions.  Asset allocation can be an opportunity to limit risk by diversifying funds between particular asset classes.  Within asset classes (e.g. shares), there are also asset allocation decisions to be made with regard to geography, industry sector or theme or market capitalisation.

Asset classes

Asset classes are the various categories of investment available for investment. Shares, bonds, property and commodities are examples of different asset classes with each having differing investment characteristics.

Asset value

The exact value of fund-owned assets.

Assets of a fund

Assets of a fund describes the investments that are owned within a fund.

Authorised Fund

Authorised funds are typically unit trusts or open-ended investment companies (OEICs) which comply with the regulations put in place to protect investor interests.

Authorised Fund Manager

Every publicly accessible UK unit trust must be managed by a regulated investment firm and overseen by a trustee. The Authorised Fund Manager is the firm that manages the fund. (See ‘Authorised Fund’).



A benchmark is a point of reference against which performance of a fund can be compared.  For the T. Bailey Multi-Asset Dynamic Fund, this benchmark is UK inflation plus 3% over rolling 5 year periods.


Beta is a way of measuring how sensitive an investment is to general market movements up or down.  A fund with a high Beta would be very sensitive to market movements whereas a fund with low beta would be less sensitive.

Bid price

For dual priced funds, the bid price is the price when you sell or redeem shares or units in a fund. This is not applicable to the T. Bailey funds as the T. Bailey funds are ‘Single Priced’.

Bid/Offer spread

The bid/offer spread is the difference between the selling price of units and shares in a fund, and the buying price. Typically, the buying (offer) price for investors will be higher and the selling (bid) price will be lower to reflect the fact that the underlying assets (e.g. shares) will have a bid/offer spread too.  The T. Bailey Funds do not have a bid/offer spread, as our funds are Single Priced. (See Dilution)


A bond is an IOU issued by companies and governments, as they borrow money from individuals, which then pays back a fixed income at regular intervals. Organised over a specific amount of time, at the end of the period, the entire sum will be paid back to the lender.



Capital is the amount of money invested in a unit or shares. When discussing funds, capital can also mean the market value of the assets within the fund (excluding income).

Capital Gain

Capital Gain, or Realised Capital Gain, is where a profit is made on an asset when it is sold for a higher price than it was originally bought for. Unrealised Capital Gain is simply where the asset is valued at a higher selling price, but has not yet been sold.

Capital Gains Tax (CGT)

This is the tax paid on the profits made when an asset is sold. Unless units and shares are held through a pension plan, ISA or tax-exemption system, any profits (above the annual allowance) made through the sale of assets is taxable. No CGT is payable on transactions within an authorised fund and investors will only need to consider CGT when selling units in the fund itself.

Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.

Capital Growth

Capital Growth is the increase in value of an investment from its original amount, excluding income. Funds targeting capital growth aim to select investments that will increase in value over time.

Capital Loss

Capital loss occurs when assets are sold for a lower price than they were originally bought for.

Capital Return

This is the rate of return, excluding income, on an investment. It is the increase in value of assets in a portfolio.


Cash describes all money, paper or digital. In relation to funds, cash usually refers to the percentage of a fund that is on deposit rather than invested into another asset class.  This could be a short-term decision by the fund manager who expects asset prices to fall and therefore an opportunity to buy assets more cheaply may present itself.

Closed-ended Fund

A closed-end fund is organized as a publicly traded investment company. It is a pooled investment fund with a manager overseeing the portfolio; it raises a fixed amount of capital through an initial public offering (IPO).  It is commonly referred to as an Investment Trust.

Collective Investment Scheme (CIS)

A collective investment scheme (CIS), which is sometimes referred to as a ‘pooled investment’, is a fund that several people contribute to. A fund manager will invest the pooled money in one or more types of asset, such as stocks, bonds or property.


A custodian is a financial institution that holds customers’ securities for safekeeping to minimize the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form.



A depository is an authorised company, which is independent of the fund manager. It safeguards and secures your investment in an OEIC, providing oversight of the fund manager on your behalf. For a unit trust, this role is fulfilled by a Trustee.


Derivatives are financial contracts, the value of which is related to the value of a financial index or underlying asset. Often used for risk management purposes (see ‘Hedge’), they can also be used to enhance returns.

Dilution, dilution levy or dilution adjustment

For funds that are single-priced rather than dual-priced, dilution is the reduction of value suffered by a fund as a result of transacting, due to the fact that assets are purchased at offer price (or sold at the bid price) and valued at mid price.

Dilution levy or dilution adjustments can be implemented by a fund manager on large deals to reduce or eliminate the dilution impact for other investors.


Distribution describes the income paid to an investor from a fund’s income units. This income typically comes from dividends or interest provided by the underlying investments of the fund.


Designed to minimise risk, diversification is a strategy in which investment is made in a variety of asset classes, industry sectors and geographical locations to avoid ‘putting all your eggs in one basket’. Commonly used by fund managers, this helps to protect the investors interests, and presents further opportunity for successful investment returns.


Dividends are a portion or percentage of a company’s profits, typically paid once or twice annually, to investors as cash payments or shares. See ‘Income’.

Dual Pricing

Dual pricing describes the two prices (Bid and Offer) presented when buying or selling units or shares in some funds. The T. Bailey Funds are Single Priced.


Entry charge or fee

Otherwise known as the Initial Charge, the entry charge is a fee taken from your money before it is invested. T. Bailey Asset Management do not charge any entry charges but initial charges may be levied by your adviser.


Equities is another name for shares in a company.

Equity exposure

The equity exposure of a fund is the portion of the fund that is invested into (and therefore exposed to) equities.

Equity Funds

A fund that invests predominantly in company shares either locally or globally.


ETF, or Exchange Traded Funds are passively managed and are traded and listed on the stock exchange. These funds typically attempt to replicate and track an index. When derivatives are used to simulate or mimic the returns of the index, rather than replicating using physical stocks, they are described as synthetic ETFs.

Ethical Fund

Ethical funds are typically socially and environmentally driven, investing in eco-friendly and morally positive activities. These funds also aim to invest in ethical companies, such as those who recycle, and can also be described as Socially Responsible Investments.

Execution Only

When an individual investor instructs action without receiving investment advice or guidance from a financial adviser.

Exit charge

Also known as a redemption charge, this is a fee taken from your investment proceeds by some funds before they are paid. T. Bailey do not charge an exit charge.


Financial Conduct Authority (FCA)

The FCA regulates authorised investment funds.  The FCA is the UK regulator of Financial Services and requires firms to adhere to strict rules, principles and guidance to put their customers’ well-being at the core of their business.

Financial Ombudsman Service (FOS)

The FOS is an independent body that handles complaints regarding investment and financial services companies.

Financial Services Compensation Scheme (FSCS)

The FSCS exists as the fund of last resort for customers of UK financial services firms. It is able to pay compensation to consumers if an authorised financial services firm is unable, or likely to be unable, to pay claims against it.

Fixed Income

Another term for Bonds or Gilts as an asset class where the amount of income paid out is fixed.

Forward Pricing

The most common method of pricing authorised investment funds. The price of sale for units is calculated at the same time daily. An investor giving an instruction to buy or sell receives the unit price at the next valuation point of the funds.  The T. Bailey funds are valued daily at midday.

Fund Manager or fund management

The fund manager, or management company, is the firm responsible for making decisions on how a fund should be invested. Working to the established rules set up by the regulator, they can also be described as the ‘fund provider’.

Fund of funds

A fund of funds is a fund which invests in a portfolio of other funds. Fund of funds generally come in two ‘flavours’. In the case of a ‘fettered’ fund of funds, the underlying funds will be funds managed by the same company. In the case of an ‘unfettered’ fund of funds, the underlying funds will be from different fund management groups. T. Bailey’s funds, (excluding the T. Bailey UK Responsibly Invested Equity Fund which invests directly in companies and is not a fund of funds) are unfettered which means that they are completely independent with no vested interests.

Fund platform or supermarket

An online fund supermarket is a service where investors can buy and sell funds and other financial products from multiple portfolios through one account.  It may also provide information and other relevant material.  A Fund Supermarket will typically charge a fee for its service.  Investing directly with T. Bailey allows an investor to avoid paying a platform fee.

Fund provider

The fund provider has responsibility for its operation, and can establish an investment manager to oversee its assets and investor promotion.



Gain is the profit made when assets are sold for more than their original buying price.

Gearing or Leverage

Gearing is typically used to describe longer term borrowing by a fund, with the objective being borrowing money and investing it in profit-heavy assets. Gearing can lead to higher returns but can also lead to higher risk. The T. Bailey Asset Management funds are not geared.

Gilt or Gilt-edge security

A bond issued by the UK Government is known as a Gilt.  A Gilt can be purchased by investors and will pay a regular fixed income expressed as a percentage of the capital value.  The term ‘Gilt Edge’ came from the gold ‘gilding’ around the edges of the original paper certificates.

Global Sector

Contains funds that invest at least 80% of their assets globally in equities. Funds must be diversified by geographic region.

Government bond

A bond issued by the Government.

Growth Funds

A Growth Fund is a fund that aims to grow through capital appreciation.  The fund manager will tend to target holdings which they believe will demonstrate above average growth over the long term. Growth funds typically are less focussed on generating a yield than income funds.



Hedging typically means taking a position intended to offset potential losses that might be incurred by another investment.

Hedge fund

A private fund that is not allowed to be publicly offered. This is due to the structure, borrowing or investment powers of the fund, as they do not comply with the regulatory requirements for retail funds.

Historic yield

Yield is typically expressed as a percentage and is a measurement of dividends paid out over the previous 12 months divided by the current price.



Income generally comes from dividends or interest. Income is either paid out to unit holders (see ‘Income Units’), or is invested back into the original fund (see ‘Accumulation Units’).

Income units

Income units are units where any income is paid out to unit holders rather than being reinvested into the fund.  At the end of the accounting period, income units will go ‘XD’ and the price of the units will fall by an amount equivalent to income to be paid out. The T. Bailey Multi-Asset Dynamic Fund and T. Bailey Multi-Asset Growth Fund offers a choice of either income or accumulation units.

Index tracker

Index trackers are funds that hold relevant assets in the same proportions as a given index, in order to replicate or track them. Trackers are passively managed which means that they will track markets both up and down.   


An index is a complex mathematical compilation of rates, prices, commodities and currencies of markets and sectors. This can help construct an estimation of the price movements of those sectors.

Individual Savings Account (ISA)

An ISA is a type of savings account that is tax free.  There are different types of ISA aimed at different types of investor.  T. Bailey offer a Stocks and Shares ISA as well as a Junior ISA through which the T. Bailey Funds can be held.


Inflation describes a general rise in high street and retail prices over time.  Inflation in the UK is currently measured by the Consumer Price Index (CPI).

Inflation risk

Inflation Risk refers to the risk that as the price of goods and services rises over time, the purchasing power of savings will decrease unless they grow by at least the rate of inflation.  The WS T. Bailey Multi-Asset Dynamic Fund aims to deliver at least UK inflation plus an additional 3% over a market cycle (5 years) and the WS T. Bailey Multi-Asset Growth Fund aims to deliver at least UK inflation plus an additional 4% over a market cycle (5 Years).

Initial charge

Identical to the entry charge, this is a charge that some fund managers may impose that occurs before your money is invested. T. Bailey do not impose an initial charge but initial charges may be levied by your adviser.


Interest is typically an additional sum of money received on certain assets such as deposits, bonds and gilts etc.


A middleman, such as a financial adviser or accountant, providing advice or supervision to the underlying investor in relation to buying and selling of shares and investments.

Investment Association (IA)

The Investment Association is the trade body that represents UK investment managers.  The IA groups funds into sectors containing funds that are similar. (See ‘Global Sector’, ‘Mixed Investment 20% – 60% shares Sector’ ‘mixed investment 40%-85% shares’ and ‘UK all companies’).

Investment fund

An investment fund is a product designed to help you invest your money with others into a variety of assets. Each fund has a specific objective or aim.

Investment manager

An investment manager is an individual or company that is responsible for the management and investment of money held within a fund.

Investment objective

This is the overall goal for a fund. Depending upon the particular fund, the objective might be to generate income, provide capital growth, to generate income and capital growth or to provide capital protection.


See Individual Savings Account

ISA Transfer

An ISA Transfer occurs when an investor transfers from an existing ISA run by one ISA manager to another.  In the case of transferring Stocks and Shares ISAs, it will involve selling the original fund and buying a fund run by the new provider.  This all takes place within the tax wrapper so there are no tax implications.  T. Bailey are happy to accept ISA transfers from other ISA providers.


Junior ISA

A Junior ISA is a type of ISA designed to be a tax-efficient savings account for under 18s.  Parents, guardians and friends can contribute on behalf of the child. T. Bailey are pleased to offer a Junior ISA.

Junk Bonds

Junk Bonds are bonds that have a poor credit rating.  Also known as High Yield bonds, they typically pay a higher yield than bonds with a good credit rating but are more likely to default.


Key Investor Information Document (KII document)

This document provides the investor with important information about their potential investment fund including costs, risks, performance and objectives. It is a requirement that this document be available to the investor prior to investment. The regulator specifies both the information contained in the document and the format of it.


Liquid or liquidity

An investment is described as liquid if it can be quickly and easily bought and sold. The T. Bailey Funds can be traded daily with settlement made within four business days of each transaction subject to valid instructions.

Long – as in to be ‘long’ of an investment

To be long of an investment means to hold onto to it, after it has been bought, with the expectation that its value will rise over time. (See ‘Short’).

Long report

The long report is a progress report, usually produced every six months and obtained from the fund manager. This details any changes in investment approach as well as an update on the fund including performance and cost information.

Lump sum

An amount of money deposited into an investment fund in one complete transaction.


Market capitalisation

Market capitalisation describes the value of a company or corporation, where their shares are traded and listed on the stock exchange. This value is estimated by multiplying the market price of its shares by the number of shares the company currently has in issue.

Market risk

Market risk is an investment risk that can potentially impact the entirety of an asset class as asset prices rise and/or fall.


The mid-price is the price between the best price of the sellers of the stock or commodity offer price or ask price and the best price of the buyers of the stock or commodity bid price. It can simply be defined as the average of the current bid and ask prices being quoted.

Mixed Asset Funds

Mixed asset funds can invest in a broad variety of asset classes including cash, bonds and shares. In theory, performance should not rely upon any one asset class.  The WS T. Bailey Multi-Asset Dynamic Fund and WS T. Bailey Multi-Asset Growth Fund are mixed asset funds.

Mixed Investment 20-60% Shares sector

The Investment Association groups funds into sectors which contain funds which are similar.  This is intended to make comparison of funds easier.  The mixed investment 20% – 60% sector contains funds with between 20% – 60% of assets invested in shares and at least 30% invested in bonds and/or cash.  The WS T. Bailey Multi-Asset Dynamic Fund currently sits in this sector.

Mixed Investment 40%-85% Shares sector

Funds in this sector are required to have a range of different investments. However, there is scope for funds to have a high proportion in company shares (equities). The fund must have between 40% and 85% invested in company shares. The WS T. Bailey Multi-Asset Growth Fund sits in this sector.

Monthly Investment

A monthly investment is an amount of money deposited or invested into a fund every month by direct debit.  This can be useful as a regular savings plan.  T. Bailey allows investors to set up a regular monthly investment from £50 a month.

Monthly Savings Plan

The monthly savings plan is a timetable or schedule encouraging the investor to deposit a certain amount of money per month.  T. Bailey allows investors to set up a regular monthly investment from £50 a month.

Multi-manager fund

A multi manager fund is one which invests in other managers’ funds rather than directly into individual stocks and shares. (See ‘Fund of Funds’).


Net Asset Value (NAV) of a fund

The entire summarised value of a fund’s liabilities and assets. This can be expressed as a total fund size in monetary terms or as a price per unit.

Non-UCITS Retail Scheme (NURS)

Required to meet certain standards set by the UK financial services regulator, NURS are typically property or multi-asset funds that have been authorised to be sold to the public in the UK. They are not governed by the EU regulation of funds, as described under the UCITS Directive, as they invest in assets that the Directive does not allow.

The T. Bailey Funds are UCITS funds rather than NURS funds.


Offer Price

The price at which investors buy new shares or units in a unit trust. The opposite, i.e. the selling price, is called the ‘bid price’, the difference between the two is the ‘spread’.

Ongoing Charges Figure (OCF)

The Ongoing Charges Figure is based on a fund’s expenses incurred over a year. That figure may change from year to year. The figure includes the weighted average ongoing charges figure of a fund’s investments. It excludes payments related to interest on borrowing and transaction costs except in the case of transaction fees payable to the custodian and any entry/exit charge paid when buying or selling units in another fund.

Open-ended fund

An open-ended fund is a fund where the number of shares or units in existence can increase or decrease. The fund manager creates units for new investors and cancels units for those selling out of the fund. The term ‘open ended’ is used because the number of units that can be created is theoretically unlimited. The T. Bailey Funds are open-ended.

Open-ended Investment Company (OEIC)

An open-ended investment company (OEIC) is a type of company or fund in the United Kingdom that is structured to invest in other companies with the ability to adjust its investment criteria and fund size.


Passively Managed Funds

Also described as Index-Tracker Funds, this particular form of fund mirrors or mimics the performance of a specific index, i.e. the FTSE 100, typically mirroring the components of that index. This helps the fund to track the progress of said index, as it will typically buy and sell shares in the same proportions represented in the index.


Fund performance is measured by comparing elements, such as capital growth (as measured by the price) & income paid. (See ‘Total Return’).

Performance Fee

Some funds charge an additional fee if the fund meets predetermined targets. T. Bailey do not charge a performance fee.


Much like a fund supermarket, a fund platform is an online service that facilitates the buying and selling of funds typically, for a fee.


A portfolio describes a collection of investments.

Portfolio turnover

Portfolio turnover describes the extent to which fund managers have bought and sold investments within a fund during a particular length of time.

Pound cost averaging

The effect produced by investing in a fund, on a regular or frequent basis rather than as a lump sum, is described as pound cost averaging. If asset prices fall, the regular payment buys more units. If asset prices rise, the regular payment buys fewer units. In this way, the regular investor has the impact of volatile markets softened as opposed to investing a lump sum.


Described as investing in commercial or residential land and buildings, property investment can cover shares in property companies, actual properties, and property developers.  The T. Bailey Funds are not allowed to invest directly in property but may invest in shares that give exposure to property as an asset class, e.g. via an Investment Trust.


A fund prospectus contains detailed information about the fund the investor hopes to buy and includes detailed information about expenses and risks.


Real return

A real return is the rate of return on an investment after inflation has been taken into account. For example if an investment returns 5% over a year but inflation is 2%, then the real return is 3%. The WS T. Bailey Multi-Asset Dynamic fund aims to return UK inflation plus 3% over rolling 5 year periods, thereby growing assets in real terms.


Redemption describes the sale of units or shares from the investor back to the fund in exchange for cash. In funds such as the T. Bailey Funds, an investor can redeem part or all of the investment at the next valuation point of the funds and receive cash four working days later.

Regular savings scheme or plan

A regular savings scheme or plan is a system of arrangements that allow the investor to save or invest a fixed cash amount on a monthly or yearly basis.


The return of a fund is made up of two main elements – an amount of income earned by an investment less costs and a growth in the capital value of investment. When combined, these two types of return become the total return.

Risk profile

A risk profile is used to describe the ability and understanding of an investor to face the loss of capital, or an investment’s failure to meet financial targets.

Risk rating

Risk ratings are designed to evaluate the likelihood of risky investment. They help investors to gauge how much a fund could go up and down in value. Higher risk funds will typically exhibit a higher volatility. (See also ‘SRRI’).


Sectors (See also ‘Investment Association (IA)’)

Sectors are a method of grouping funds into those with similar investment objectives, or classes of investment. The T. Bailey funds sit within the Investment Association sectors.

Share class

Each fund can have different share classes. These classes can be defined by many different factors, with some paying out income to investors but others accumulating the income within the designated fund. Share classes may also have different annual management charges and ongoing charges figures.


Usually referred to as ‘going short’, this is the practice of trying to profit on an investment by betting that its value will fall in the future. This is done by selling an investment that is not currently owned by the seller and is typically achieved by using derivatives. This is done in the hope that it can be bought later for a cheaper price prior to delivery, therefore allowing the seller to make a profit.

Single pricing

Single pricing refers to a fund that has one price that is the same for buyers and sellers. The T. Bailey Funds are singly-priced. This is the opposite to ‘dual pricing’.


The synthetic risk and reward indicator (SRRI) is used to classify investment funds on a scale of 1 -7.  1 represents lower risk and 7 represents higher risk.

Stock market, Stock Exchange

The stock market is an electronic system in which securities, bonds and shares are facilitated, either between buyers and sellers, or brokers and dealers.

Style/Investment style

An investment style describes the strategy or theory applied to the management of an investment portfolio or fund. Value investing is an example of this, as its strategy is to identify the companies with undervalued shares.


Total Expense Ratio (TER)

The TER used to describe the total cost of investing in a chosen fund, as expressed by a percentage of investment value. It has been replaced by a more comprehensive ongoing charges figure (OCF).

Total Return

This is a combination of the total income received less costs and the capital return in relation to an investment.

Tracker Funds

Much like passively managed funds, tracker funds mimic the performances of a specified index. A tracker fund holds the components of that index, and tracks the progress of it by copying its pattern of buying and selling shares.


A trustee is a person or firm that holds and administers property or assets for the benefit of a third party. A trustee may be appointed for a wide variety of purposes, for a charity, for a trust fund or for certain types of retirement plans or pensions.



Undertakings for Collective Investment in Transferable Securities (UCITS) is a regulatory framework of the European Commission that creates a harmonized regime throughout Europe for the management and sale of open-ended funds which are available to the general public, while incorporating certain investor protection mechanisms.

UK All Companies

An IA sector containing funds which invest at least 80% of their assets in UK equities which have a primary objective of achieving capital growth. The WS T. Bailey Responsibly Invested Equity Fund sits in this sector.


A unit is a share of an investment fund. It is a proportionate share of rights of the investment returns, earned by a unit trust.

Unit Trust

An open-ended unit trust is an authorised investment fund created in the same legal structure as a trust.



A valuation of a fund is a process to work out the overall value of its assets and liabilities.

Valuation Point

The valuation point is a particular time in the working day where fund valuation is performed, resulting in the price that is used to execute purchases and sales. The valuation point of the T. Bailey Funds is midday every working day.


Volatility measures the movements of an asset up and down over time. A more volatile fund is seen as more risky than a less volatile fund although the returns may be greater over time. (See ‘SRRI’).



A wrapper is a term typically used to describe a tax efficient vehicle, for example a pension plan or an ISA, where fund investments and assets can be held.


XD (ex-dividend)

At the end of an accounting period, the income in an income-paying unit class is stripped out of the price and is used to pay out income to investors. When this happens the price falls and the price is labelled XD up until the point at which income is paid out. (See ‘Historic Yield’).



A yield is a calculated amount of income, expressed as a percentage of investment value. This is estimated through comparisons of income from different investments, and can be calculated in different ways depending on the type of asset or fund.