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For those who have a heightened level of attention-to-detail, you may have been expecting this to be the Glossary letters D-F, thanks to the glory of technology, a small typo was made and the wrong title was put on the email!

This is definitely in fact the glossary letters G – J, the third instalment to our Glossary of Market Terminology.

We hope you enjoy this third instalment, but if there is anything that we have missed out that is worth mentioning here or you are not sure of what it means, please leave a comment and we can help!

On with the glossary…

Download the full CSS Investments Glossary of Market Terminology PDF Here!


GDP: This is an acronym for Gross Domestic Product. This is what is used to refer to a commonly-used economic indicator representing the strength of a country’s economic activity. It is the sum of all final goods and services produced within a country, it is usually calculated on a quarterly basis and provides a clear indication as to whether a country’s economic activity is increasing or decreasing.

Gearing: This is a word used to describe the level of debt a company has in comparison to its level of equity. Companies can use gearing as a means of multiplying gains and losses. An example being if a company has £50m debt and £75m equity it’s gearing is 66%. Companies with lower gearing are generally considered lower risk, where as highly geared companies can appear to be risky for equity investors, but can be more volatile in share price swings.

Gilt: Gilt, is a bond issued by the UK Government. In its history, the certificate was once gilt-edged, hence where the name was derived from. These investments which are generally considered ‘low risk’ tend to have fixed coupons, although some may have the payments linked to the level of inflation (these are referred to by their appropriate name of ‘index-linked gilts’).

Gross Margin: Gross margin is the difference between a firm’s sales and cost of sales, represented as a percentage. The higher this number is, the better it is. The higher margin represents the core activities of the business are both profitable and represents the firm has a greater level of freedom, should sales slow up. Sales – Cost of goods sold = Gross Profit. (Gross profit / sales) * 100 = Gross Margin.

Gross Profit: This is an accounting term and is used as a staple for certain fundamental analyses. Gross profit is the profit a company generates after the total cost of sales is taken away from the net sales income. Revenue – Cost of goods sold = Gross Profit.

Growth: Whilst this can be loosely defined, in the stock market growth tends to accompany a description where a particular security has increased its value. Similarly, investors can aim for ‘growth’ as an objective, which has a similar meaning, where their portfolio of investments grows collectively.

Growth Stock: This is the type of stock (or any security) which has a track record of consistent above-average growth sales and profits, which the market predicts will continue.


Half-a-bar: A ‘slang’ term for £500k worth of capital.

Hang Seng Index: The Hang Seng is a free-float adjusted market-cap weighted stock market index, in the Hong Kong Stock Exchange (HKSE). It contains 50 constituent companies and is used as the main indicator of the overall market performance in Hong Kong, representing 58% of the total HKSE.

Hawk: A descriptive term, describing the mood set during a speech from a policy making body within a Central Bank. People would describe the spokesperson as being a ‘hawk’ or ‘hawkish’ if the theme is for a stricter approach to keeping inflation under control.

Hedge: This term refers to an investment technique (also commonly referred to as hedging) that will enable the investor to limit their risk due to adverse price movements in assets.

Hedge Fund: Hedge funds are a term to describe either a company or a particular fund pursuing a variation of strategies using a variation of assets. With a particular use of debt and derivatives to leverage their returns.


Iceberg Order: This is a conditional request made to the broker to buy or sell a large requirement of stock, but in a smaller predetermined quantity. Usually this is done by institutions to hide the initial size of the underlying order, by masking the total size with smaller quantity orders.

Income: This is the term used to describe a regular inflow of money from regular income or investments. It can also be an objective for a portfolio, investors will want to receive regular payments from the money they have in their investments that pay a coupon or dividend.

Income Tax: This is the tax that individuals will pay on income, whether from earnings or investment rated. The rate paid is directly linked to the amount of income in question. There are tax-efficient means of investment wrappers available to an investor specifically, in the form of an ISA 9see below) for example – this will reduce the susceptibility to paying income tax, due to its agreement of lower tax paid on any income.

Index/Indices: The latter being the plural of the first word, an index is statistical measure of change calculated by various providers of company data. An index will consist of a particular set of securities in a specific asset class (equities, bonds, commodities), for example – the MSCI Emerging Markets Index, as an example of a narrow focus, alternatively the FTSE All Share covers a much wider range.

Inheritance Tax: This is the tax paid by a UK resident on a UK domiciled person’s death certificate. A dead person’s assets are calculated and then tax is levied at a flat rate of 40% on any amount above the exemption limit. Resulting from this there are many options available to a person to reduce susceptibility to inheritance tax, but these are things that can be discussed with a financial advisor.

Interest Rate: This is the amount charged by a lender to a borrower for the use of an underlying asset, these are usually agreed on a per annum basis, this can be the annual percentage rate (APR). For example, a bank charging interest on a loan of £10,000, at 5% per year would be equal to the borrower being charged £500 on top of the repayment of £10,000.

Investment Grade: This is what a bond is typically described by when it has exceeded Standard & Poor’s rating of BBB or higher. These are considered to be suitable for a wide range of investors.

Investment Trust: This is the term to describe an investment company with a fixed share capital which allows investors to purchase a professionally managed portfolio of investments, whilst only having to purchase the one share. These shares are openly traded on the stock market and the underlying portfolio manager can pursue a specific goal with the investment trust that an investor may not otherwise be able to pursue.

IPO: This is an acronym for an Initial Public Offering. This is the term used to describe the initial flotation of shares on the stock market. Usually this is done because a company would like to raise finance for growth, or for the directors to be able to ‘cash in’ on a business.

ISA: This is an acronym for Individual Savings Account. It is a tool used by savers/investors to protect their cash or investments from Income Tax and Capital Gains Tax. It is referred to as a wrapper, in which you can wrap your investments or cash in the account, choose what you wish to put in to the account be that cash or investments and it will provide the protection, making any interest earned tax free. There are limitations in place however, as they currently stand a maximum of £15,240 can be invested per tax year.


JISA: When referring back to the tax efficient means of investment in an ISA, this is a junior version meant for a child, ‘junior’. These are an individual savings accounts for children where any interest earned is completely tax free. The junior will then only get access to the money once they reach the age of 18 years old.

Junk: This is a descriptive word, when used to describe the quality of an investment asset class (typically bonds). They become marked as junk when Standard & Poor give a rating of ‘BB’ or lower. They become junk because of their high likelihood of default risk, in relation to investment grade bonds.

I hope this was useful. Look out for the next instalments next week.

Did we miss anything? Let us know in the comments or please email me at editor@css:investments or leave your request in the comments section below.


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