Click & Invest. Managing your investments

Transcription

1 Managing your investments

2 Building trust from the start When you entrust us with managing your money, you want to know exactly what we will do with the investments we buy and look after on your behalf. That means clearly understanding: How we will be able to work towards your investment goals Where we will invest your money What risks are involved This guide explains the key steps we take when investing your money, and answers the questions we are most frequently asked by clients both before, and while using. Our aim is to give you all of the information you need to help you make an informed decision about who to entrust with your investments. Contents Understanding your experience and goals 3 Choosing the right investment objective 4 The service 5 Thinking seriously about risk 6 Understanding risk and return 7 Choosing an appropriate level of risk 8 Selecting the right investments 9 Asset classification 10 Understanding assets at a glance 11 Strategic asset allocation 12 Tactical asset allocation 12 Fund selection 13 Benchmarks 13 Checklist - is investing right for you? 14 Your questions answered 15 Investment strategy factsheets 17 2

3 Understanding your experience and goals To manage your money effectively, we need to recommend an investment strategy that is based on your investment goals and your risk profile. So we will first need to understand: Your financial knowledge and experience, and your attitude to investing (attitude to risk) Your understanding of the risks attached to the investment service offered by Investec Your aspirations for what you need, or want, your investments to deliver over a specified period of time 3

4 Choosing the right investment objective At, our investment strategies are designed with medium to long-term investors in mind, and are therefore structured primarily to maximise the growth of your initial investment. The level of growth you could potentially achieve will depend on how well the markets perform, as well as on the level of risk you are prepared to take. Therefore the right investment strategy balances potential risks against potential returns. Whatever your investment objective, the greater return you seek, the more risk you should be prepared to take. How we determine your risk profile is explained later in this document. Please note that all of our investment strategies are growth as explained above and that we do not provide investment strategies with an income objective. 4

5 The service It is important that you understand the service offered by, which is simplified advice followed by discretionary portfolio management. This means that: will manage your investment portfolio in line with an agreed investment strategy, which has been recommended and accepted by you following our assessment of your risk profile. Click & Invest therefore, has full authority, at our discretion, to buy and sell particular investments without discussing with you in advance, and to enter into any kind of transaction or arrangement for your account, which is in line with the agreed investment criteria. What advice does offer? We provide simplified advice which is a form of restricted advice. Restricted advice means that we will only advise you on investment management, and will not advise you on other retail investment products such as life policies. Simplified advice means that we do not provide an overall assessment of your current financial situation, or take into account investments you may already hold. Working out if investing is right for you Before you decide to invest, you should be comfortable that your financial needs have been met. This means you should ensure: You have an adequate amount of money readily available as emergency funds. For example, three months worth of outgoings in cash that you can instantly access. You have sufficient and appropriate financial protection for you and your family. For example, life insurance cover if you have dependent children. You do not have existing debts that would be better repaid or reduced. For example, an outstanding balance on store cards/ credit cards. If you are unsure of any of the above, then we would recommend that you speak to a financial adviser before investing. If you would like to review any existing investments, or would like these taken into account, then the simplified advice service is not suitable for you. You should speak to a financial adviser who can look at your full investment needs. Our recommendation is based solely on the information that you have provided us with, and the amount of money you have told us you would like to invest. 5

6 Thinking seriously about risk When thinking about an investment objective, many people think first and foremost about the potential rewards. However, it is also essential that we explain the risks involved. There are three aspects to this, which you will need to consider: 1. Capacity for Loss Your financial ability to withstand a loss of capital in your portfolio: or your capacity for loss. This describes the degree of loss in the value of your investment portfolio that you are able to tolerate without resulting in a material decline in your standard of living. 2. Attitude to Risk How much risk you are willing to take in order to achieve your chosen objectives: known as your attitude to risk or attitude to investing. 3. Investment objectives How much risk you will need to take to give your investment the potential to reach your objectives: the required risk level. If you are uncomfortable with these risks then we will be unable to create an investment portfolio for you. With all of this in mind, it is vital that we fully explore and consider the different aspects of risk to ensure we recommend the best way forward for you. To help you in this process, it is worth considering the following questions carefully: How long do you want to invest your money for? Is there a particular date when you will want to withdraw your money, such as when your child starts school? How do you feel about putting your money at risk? How would you feel if some or all of it was lost, even for a short period of time? If you were to lose invested money, how easy would it be for you to deal with those losses? How, for example, might it affect your family or lifestyle? It is important you understand the main risks involved with investing with. Investing via requires you to have both the capacity and willingness to accept a degree of loss of your capital and; The risk that you need to take to achieve your chosen objectives - the required risk level - must not exceed the risk that you are willing and/or able to take. 6

7 Understanding risk and return Unlike savings that you would keep in a bank or building society account, investing involves a higher amount of risk. The value of your investment may go down as well as up over time, therefore it is important to make sure you re comfortable that you might not get all the money back that you originally invested. Chart 1 illustrates the relationship between risk and return. It is generally accepted that your chances of receiving better returns are improved if you are prepared to take more risk and you must always be able to afford to do so. It is also worth noting that portfolios constructed to be low risk do not always produce the lowest returns or pose the lowest risk to your capital. Neither do high risk portfolios always lead to the greatest returns. This will all depend on market conditions. In specific reference to investments, you may see this risk described in terms of high or low volatility. If the value of an investment moves up and down rapidly over a short period of time, it is commonly described as highly volatile. Whereas the value of an investment that moves up and down more slowly over a longer amount of time, is described as having lower volatility. Return Value Gain 0 Loss Chart 1: The relationship between risk and return Low Lower risk Low potential for loss, but also lower returns. Lower Medium Level of Risk Higher risk Potential for high return, but also higher loss. Higher Chart 2: How investments can fluctuate over time High Chart 2 shows how a typical investment can fluctuate over time. Investment B is said to be more volatile than Investment A. Investment A Investment B Time Both charts are for illustrative purposes only 7

8 Choosing an appropriate level of risk How we assess risk We have developed a questionnaire that determines your attitude to risk and capacity for loss in relation to investing. We will recommend a suitable investment strategy and portfolio for you based on your responses to this Attitude to Investing questionnaire. We offer five different investment strategies based on your attitude to investing. Low Defensive strategy Low/Medium Cautious strategy Medium Measured strategy Medium/High Adventurous strategy High Aggressive strategy 8

9 Selecting the right investments Your portfolio will contain a number of different types of investments, also called assets, each belonging to a particular asset class. At we invest in the five major asset classes. We have ordered them below as per our view of their risk level, from low to high. Further details on the risk of an asset is explained on the following page. Cash Fixed interest Commercial property Equities Alternative investments These different asset classes, and the money invested in them, carry different levels of risk and possibilities for returns; though these are not the only risks to be considered when constructing your portfolio. We also take into account a large number of other factors in our monitoring process. This is designed to ensure that concentration of risk - or having too many eggs in one basket - is controlled, and that the quality of the investment portfolio is appropriate to the investment strategy recommended. This can also be referred to as diversification. All this means that when we set up and manage your portfolio, we go to great lengths to ensure we are selecting a suitable balance of investments in order to help you achieve your objectives. In constructing your portfolio, not only do we take into account the expected risk and return from each asset class, but also the most appropriate way to invest. We undertake an in-depth analysis of each collective fund we invest in to ensure their geographical focus and management styles combine to effectively implement our investment strategy. We believe in taking a collaborative approach when it comes to selecting investments. That s because experienced researchers and Investment Managers, when supplied with the best available information within a disciplined framework, should collectively arrive at better decisions than could be expected by an individual decision-maker. Our Investment Managers and in-house Research Team therefore, work together to identify and collate our preferred lists for the different asset classes, which will form the foundation of every portfolio. 9

10 Asset classification This diagram shows the five main asset classes that we use. It also illustrates our view of the amount of risk that each asset class carries relative to the others. Listed within the asset classes below you will also find examples of some of the main types of investments that your portfolio may contain. Highest Risk Lowest Risk Money Market Funds Time Deposits Cash Cash Preference Shares Emerging Market Government Debt High Yield Corporate Dept Investment Grade Corporate Bonds Major Government Bonds Fixed interest Commercial Property Funds (investing directly in bricks & mortar) Commercial property Emerging Market Shares and Funds UK Mid and Small Cap Shares and Funds Quoted Private Equity Funds Quoted Property Shares Developed Market Shares and Funds UK Large Cap Shares and Funds Equities Warrants and Options Commodity Funds Unquoted Private Equity Hedge Funds Fund of Hedge Funds Absolute Return Funds Structured Products Alternative investments The lower the risk of an asset, the greater the certainty of delivering the expected return on your original investment, either during or at the end of its life. Typically, the lowest risk assets will be made up of cash or fixed interest assets such as bonds. These investments tend to be less volatile. However, they also provide the lowest potential returns, and therefore the lowest level of protection against rising inflation. The higher the risk of an asset, the greater the risk of losses; particularly if you should ever need to sell at a time when the markets are performing poorly. The highest risk assets might include shares in smaller companies and emerging markets or commodities, and tend to carry a higher degree of volatility. They could also potentially be difficult to sell, which could mean you having to accept a lower price for them. On the upside, these assets usually have the potential to provide the highest investment returns over time. Higher risk investments can offer the highest potential for inflation protection over time. It is also worth noting that we treat a collective investment or funds as being in the same category as the investments it contains: for example, equity funds generally behave in a similar way to equities. 10

11 Understanding assets at a glance Cash Cash normally means putting your money into a bank account, but also includes high quality liquid bonds with very short maturities, typically of less than one year. Fixed interest Fixed interest assests, such as bonds, offer a more predictable return over time but may suffer shorter-term volatility. They provide good protection against loss of capital, but, (with the exception of index-linked bonds), very little protection against inflation. Commercial property Commercial property comprises of collective funds that are invested across a range of bricks and mortar properties. These may be UK or internationally based. Both the expected returns and inflation protection characteristics lie somewhere between fixed interest and equities. Equities Equities are the stocks and shares of a company. They are individually volatile and sensitive to many unpredictable variables. As a compensation for taking these risks, a higher return than for fixed interest assets may be expected over the long-term. A measure of inflation protection should also be provided by investing in equities. Alternative investments Alternative investments are anything other than traditional investments (e.g. equities, fixed interest assets, property or cash), and can include precious metals, commodities or hedge funds. It is important to appreciate that each asset class carries its own set of risks. By understanding these risks, you can gain a clearer picture of the overall risks carried by your portfolio. Each asset carries a different degree of liquidity so buying and selling is subject to the investment timeframe. If you would like to read a fuller description of the risks that individual assets carry, please see Annex 4 of our Terms and Conditions. Our experienced Investment Managers blend the different asset classes together in our investment strategies, using both strategic asset allocation and tactical asset allocation. This is described on the next page. 11

12 Strategic asset allocation Tactical asset allocation Our research process analyses how well the five asset classes have performed in the past, as well as how we might expect them to perform in the future in normal economic conditions, together with their potential volatility. Using this information, we construct a strategic asset allocation for each investment strategy. This is the single combination of assets that we believe is most likely to achieve the portfolio s return objectives over the full investment time frame, without taking unnecessary risks. If there are material changes to your portfolio however, we will of course communicate these with you via or the website. An example strategic asset allocation for a measured investment strategy Fixed interest We rarely experience what could be described as normal economic conditions. As a result of this, a key part of our process is to establish our preferred asset allocation to reflect, at any given time, the current and the anticipated economic climate. This is what we call tactical asset allocation, which is established, reviewed and revised by our Asset Allocation Committee. The committee is made up of members from both our Investment Manager and our in-house Research Teams. This tactical position can be set either side of the strategic position, but within additional boundaries that we refer to as corridors. We have defined these to give us the flexibility to manage your investments to reflect all likely market conditions. This creates a range for each asset class with a minimum and a maximum exposure. An example tactical asset allocation for a measured investment strategy Fixed interest Equities Equities Commercial property Commercial property Alternative investments Alternative investments Cash Cash % of total portfolio % of total portfolio For both of these charts, the coloured bar represents the potential lowest and highest percentages within the portfolio for each type of asset class. 12

13 Fund selection Benchmarks Our Collective Investment Committee meets every month to review and select individual funds within each of the various asset classes. This culminates in our recommended list of funds, from which the Click & Invest team constructs and monitors each portfolio, taking advantage of any tactical ideas and special situations from our in-house Research Team that may help to enhance performance. The portfolios are invested primarily in active funds, which aim to beat their respective benchmarks. Our in-house Research Team and Investment Managers regularly meet face-to-face with fund management teams, allowing us to gain a deep understanding of each fund and its process. This gives us confidence in our ability to identify fund managers that can add value over the long-term, after costs are taken into account. The composite benchmarks have been constructed to give you an independent comparison against which you can measure the performance of your portfolio. These are made up of indices, produced by external organisations, to illustrate the performance achieved over different time scales and types of investments. Some indices you may have heard of are the FTSE 100 index or S&P 500 index. We have assigned separate benchmarks that we feel are relevant to our low (Defensive), low/medium (Cautious), medium (Measured), medium/high (Adventurous) and high risk (Aggressive) investment strategy portfolios. These benchmarks will be shown in your Investment Proposal and your Valuation Reports. These benchmarks are a point of reference and are generally representative of the underlying investments. However, your portfolio may contain some investments that are not contained in the benchmark and those that may be held in different proportions. This means that performance will deviate from the benchmark index. 13

14 Checklist - is investing right for you? Using all of the information in this document we have put together a short checklist to help you decide if investing is right for you. Do I fully understand the risks being taken to meet my objectives? With this level of risk, are my objectives and timescale realistic? Have I taken my current personal circumstances into full consideration, and thought about what might happen in the future? The value of my investments will fluctuate with market conditions. How will I feel about this? Only once you have considered all of these questions, and if you feel confident that we have identified the right investment strategy, should you make the decision as to whether to invest. 14

15 Your questions answered Below are some of the most frequently asked questions we receive about how the service works. Who oversees your investment process? At, our Investment Committee meets our Asset Allocation Committee regularly to review and oversee our investment process and the assets in which we invest. Our Investment Committee reviews our investment process and makes sure that we are drawing on the highest quality resources. This Committee comprises senior management, Investment Managers and our in-house Research Team. Each month the Asset Allocation Committee sets tactical asset allocations for each asset class. These are guided by Investec Wealth & Investment s overall view of world markets and provide timely guidance for our Investment Managers. The Investment Team also meets regularly to discuss the portfolios, and agree on the implementation of recommendations from the Asset Allocation and Collective Investment Committees. Portfolios are also analysed to ensure they are in line with the investment strategy. The liquidity of our investments also means that you can to add or withdraw cash on a daily basis. Do you have your own in-house Research Team? Yes. Our in-house Research Team includes a strong team of analysts who follow disciplined and consistent processes for the sole purpose of supporting our Investment Managers. They communicate with our Investment Managers regularly, to keep them fully informed about changes in the markets. We frequently seek out long-term investments in good quality assets. But there is also value to be found in shorter-term market movements, and we are constantly on the lookout for these opportunities. How are investments selected? Our Investment Managers draw on the expertise and knowledge of both our dedicated in-house Research Team, and our external sources. Our collaborative approach allows us to select lists of good quality assets that form the base of each portfolio. Are my investment choices limited? is a model-based service, so we select the most appropriate strategy for your risk level and objectives. The Investment Team has an unrestricted, whole of market approach for choosing investments. Who selects my investments? Dedicated Investment Managers are responsible for choosing each investment in the portfolios. They assess the latest information and draw on a number of sophisticated tools and recommendations from our in-house Research Team. How often will you review my portfolio? Our tactical asset allocations are under constant review, as are the specific investments we recommend. Each portfolio is constantly monitored to ensure that: Changes in our preferred holdings are made when appropriate It remains within the asset allocation range It contains the appropriate investments for its specific risk profile It contains a diverse range of investments, which are not overly concentrated in any particular area 15

16 How do I measure performance? Portfolio performance is available for your portfolio when your log in to your account online, and will be calculated on a total return basis which includes both investment growth and income. The calculation will adjust for any additions or withdrawals you make to give an accurate picture of the underlying portfolio return. Each portfolio has a specific benchmark constructed from a composite of widely used equity and fixed income indices. These composites represent an appropriate blend of risk assets - UK & Global Equities - and traditionally low-risk assets - conventional and inflation linked Bonds - for their respective risk levels. Will my capital be put at risk? Yes. The investment management service provided by requires you to be exposed to some degree of risk. As such, an important condition is that you must be prepared for, and be financially capable of, withstanding a loss of capital. Could I get back less than I originally invested? Yes. Investments can go down in value as well as up and a loss of value in a particular asset may be temporary or permanent. For example, a company s share price may be adversely affected by temporary market conditions even when there is nothing wrong with the business. Alternatively, its value may be permanently affected by the company becoming less profitable. The impact of short-term adverse price movements can be mitigated over the longer term, however there may be a need to realise a loss at a particular time, for example, to protect against further loss or to facilitate a withdrawal from the portfolio. How do you control risk? Our approach to asset allocation is combined with our strong internal policies around the diversification and concentration of investments. This is designed to reduce your exposure to risk, within your agreed risk profile, as much as possible. So you can rest assured that our procedures, disciplines, resources and monitoring processes are applied to all investment strategies. How secure are my investments? Assets of clients are held in our Nominee Company and are recorded to clearly indicate that they do not belong to. This ensures that in the unlikely event of the insolvency of, a liquidator would be legally prevented from using clients assets to settle the firm s liabilities. As an appointed representative of Investec Wealth & Investment, which is a firm regulated by the Financial Conduct Authority (FCA), we also follow the rules prescribed by the FCA in choosing where stock or cash will be deposited for safe keeping or custody. When it comes to cash balances, the FCA client asset rules on most occasions require us to deposit your money in a client account with a bank or other credit institution of a type permitted under the rules. The rules also require us to exercise all due skill, care and diligence in the selection, appointment and periodic review of the bank: taking into account the standing, expertise and market reputation of the bank. What happens if my circumstances change? We encourage all clients to complete our Attitude to Investing questionnaire on a yearly basis, or following any substantial changes to their financial circumstances. In the event that a recommendation for a higher or lower risk strategy is made, your portfolio can be reassigned to that investment strategy, and the relevant trades will be placed by our Investment Managers to bring your portfolio in line with your new strategy. If your results suggest that you are no longer suitable for the service, you will be prompted to close your portfolio. 16

17 Investment strategy factsheets Low risk portfolio Defensive investment strategy Structure Quality: The equity content of the portfolio will be invested via collective investments where, overall, the majority of the underlying holdings will be large capitalisation stocks e.g. companies in the FTSE 100 Index. Diversification: This strategy will be predominantly invested in collective funds with some direct bonds. Any underlying equity holdings valued at over 5% of the portfolio may not, in aggregate, represent more than 40% of the portfolio. Benchmark 42.5% Inflation Linked Bonds 42.5% Conventional Bonds 10% UK Equities 5% Global Equities Volatility This portfolio will typically demonstrate modest shortterm fluctuations in value However, there may be some sensitivity to equity market movements, market interest rate expectations and to the change in value of other investments It will have higher volatility than a cash account and the capital is not guaranteed, which is the cost of seeking to gain an enhanced return Time horizon The nature of this investment strategy is best suited to those seeking to invest for a minimum of three years. Clients who intend to withdraw a significant proportion of their investment within this period should be aware of the increased likelihood of realising a financial loss. Low risk capital growth portfolio Capital growth investors seek a return in the form of capital appreciation rather than income. The level of capital appreciation is subject to your risk tolerance and market conditions. Although the mandate is growth, we may also buy investments which produce an income if we feel this will improve the total return for the portfolio as a whole. Income will be reinvested from time to time. 17

18 Investment strategy factsheets Low/medium risk portfolio Cautious investment strategy Structure Quality: The equity content of the portfolio will be invested via collective investments where, overall, the majority of the underlying holdings will be large capitalisation stocks e.g. companies in the FTSE 100 Index. Diversification: This strategy will be predominantly invested in collective funds with some direct bonds. Any underlying equity holdings valued at over 5% of the portfolio may not, in aggregate, represent more than 40% of the portfolio. Benchmark 25% Inflation Linked Bonds 25% Conventional Bonds 30% UK Equities 20% Global Equities Volatility The potential for equity investment will mean that this portfolio may be prone to shorter-term periods of fluctuating value. However, the emphasis on capital preservation will mean that these swings will usually be lower than those seen in global equity markets. Time horizon The nature of this investment strategy is best suited to those seeking to invest for a minimum of three years. Clients who intend to withdraw a significant proportion of their investment within this period should be aware of the increased likelihood of realising a financial loss. Low/medium risk capital growth portfolio Capital growth investors seek a return in the form of capital appreciation rather than income. The level of capital appreciation is subject to your risk tolerance and market conditions. Although the mandate is growth, we may also buy investments which produce an income if we feel this will improve the total return for the portfolio as a whole. Income will be reinvested from time to time. 18

19 Investment strategy factsheets Medium risk portfolio Measured investment strategy Structure Quality: The equity content of the portfolio will be invested via collective investments where, overall, the majority of the underlying holdings will be large capitalisation stocks e.g. companies in the FTSE 100 Index. Diversification: This strategy will be predominantly invested in collective funds. Any underlying equity holdings valued at over 5% of the portfolio may not, in aggregate, represent more than 40% of the portfolio. Benchmark 12.5% Inflation Linked Bonds 12.5% Conventional Bonds 40% UK Equities 35% Global Equities Volatility The potential for this portfolio to hold a significant equity content means that you should expect the shorter-term fluctuations in value to be similar to those of global equity markets Time horizon The nature of this investment strategy is best suited to those seeking to invest for a minimum of five years. Clients who intend to withdraw a significant proportion of their investment within this period should be aware of the increased likelihood of realising a financial loss. Medium risk capital growth portfolio Capital growth investors seek a return in the form of capital appreciation rather than income. The level of capital appreciation is subject to your risk tolerance and market conditions. Although the mandate is growth, we may also buy investments which produce an income if we feel this will improve the total return for the portfolio as a whole. Income will be reinvested from time to time. 19

20 Investment strategy factsheets Medium/high risk portfolio Adventurous investment strategy Structure Quality: The equity content of the portfolio will be invested via collective investments where, overall, at least 25% of the underlying holdings will be in large capitalisation stocks e.g. companies in the FTSE 100 Index. Diversification: This strategy will be predominantly invested in collective funds. Any underlying equity holdings valued at over 5% of the portfolio may not, in aggregate, represent more than 40% of the portfolio. Benchmark 15% Conventional Bonds 42.5% UK Equities 42.5% Global Equities Volatility The potential for this portfolio to hold a significant equity content means that you should expect the shorter-term fluctuations in value to be similar to those of global equity markets. Time horizon The nature of this investment strategy is best suited to those seeking to invest for a minimum of five years. Clients who intend to withdraw a significant proportion of their investment within this period should be aware of the increased likelihood of realising a financial loss. Medium/high risk capital growth portfolio Capital growth investors seek a return in the form of capital appreciation rather than income. The level of capital appreciation is subject to your risk tolerance and market conditions. Although the mandate is growth, we may also buy investments which produce an income if we feel this will improve the total return for the portfolio as a whole. Income will be reinvested from time to time. 20

21 Investment strategy factsheets High risk portfolio Aggressive investment strategy Structure Quality: The portfolio may be invested wholly in equities through collective funds but may include other asset classes to a lesser extent. From time to time the underlying equity content may be entirely made up of medium and smaller capitalisation stocks e.g. companies outside the FTSE 100 Index. Diversification: This strategy will be predominantly invested in collective funds. Any underlying equity holdings valued at over 5% of the portfolio may not, in aggregate, represent more than 40% of the portfolio. Benchmark 50% UK Equities 50% Global Equities Volatility You should expect that there may be considerable short-term fluctuations in the value of your portfolio. Time horizon The nature of this investment strategy is best suited to those seeking to invest for a minimum of seven years. Clients who intend to withdraw a significant proportion of their investment within this period should be aware of the increased likelihood of realising a financial loss. High risk capital growth portfolio Capital growth investors seek a return in the form of capital appreciation rather than income. The level of capital appreciation is subject to your risk tolerance and market conditions. Although the mandate is growth, we may also buy investments which produce an income if we feel this will improve the total return for the portfolio as a whole. Income will be reinvested from time to time. 21

22 Glossary Asset class A category of assets, such as stocks, bonds, cash or property. Bond or fixed interest investments A bond is when an investor lends money to a government or company, in exchange for regular interest payments, as well as future repayment of the original amount lent. Collective fund A fund is a pooled investment vehicle which brings money together from multiple investors. A collective fund could include unit trusts, investment trusts and OIECs. Commodities Commodities are a physical substance, such as food, grains, and metals, which are interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. The price of the commodity is subject to supply and demand. Diversification Diversification is a risk management technique which means the portfolio is made up of a mix of different types of investments. Emerging markets An emerging market is a country whose economy is progressing towards becoming more advanced, usually by means of rapid growth and industrialisation. Income Money received on a regular basis from investments. Index linked bonds An index linked bond is a bond in which payment of income on the investment is related to a specific price index. It also provides returns which will beat inflation. Indices This can also be referred to as a stock market index. It is the measurement of the value of a section of a particular stock market, such as the FTSE 100 or S&P 500. Volatility The extent to which asset prices or interest rates fluctuate over time. Volatility is often used to assess the potential risk associated with an investment. 22

23 How to contact If you would like to find out more about, visit clickandinvest.com/investment. Alternatively, give our dedicated support team a call who will be happy to answer any questions you have about setting up your account. Our team are available 24 hours a day, 365 days a year. Or, if you d prefer, you can speak to us on Facebook or Twitter. Call us or us Follow Investec Investec Limited is an Appointed Representative of Investec Wealth & Investment Limited which is authorised and regulated by the Financial Conduct Authority. Investec Wealth & Investment Limited is entered on the FCA register under reference Investec Limited is registered in England, Company Number Registered address 2 Gresham Street, London, EC2V 7QP CLI010_V2.06/17 23