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A

AIC

The Association of Investment Companies.

AIFMD

The Alternative Investment Fund Managers Directive. The AIFMD is European legislation which created a European-wide framework for regulating managers of ‘alternative investment funds’ (“AIFs”). It is designed to regulate any fund which is not a UCITS fund and which is managed and/or marketed in the EU. The Company has been designated as an AIF.

Annual General Meeting (AGM)

This is the annual shareholder meeting. All companies, except the very smallest, are required by law to hold such a meeting once a year. During the meeting shareholders are allowed to ask questions of the board. Additionally, the board of directors will explain the background to the company's trading record for that year.

B

Benchmark

This is a measure against which an Investment Trust’s performance is compared. The index averages the performance of a defined selection of listed companies over specific time periods.

C

Closed-End Fund

A collective investment scheme which has a fixed number of shares which are not redeemable from the fund itself. Unlike open-ended funds, new shares/units are not created by managers to meet demand from investors; instead, shares are purchased (or sold) only in the market. Closed-end funds are normally listed on a recognised stock exchange, such as the London Stock Exchange, and shares can be bought and sold on that exchange.

D

Discount

The amount by which the market price per share of an Investment Trust is lower than the Net Asset Value per share. The discount is normally expressed as a percentage of the Net Asset Value per share.

Discrete return

Return added to an account after a fixed amount of time (e.g. yearly). The opposite is continuous return, whereby interest is earned on an account continuously, and instantly accrues more interest.

Dividend Cover

Earnings per share divided by dividends per share expressed as a ratio.

Dividend Yield

The annual dividend expressed as a percentage of the share price.

F

FCA

Financial Conduct Authority.

G

Gearing

Net gearing is calculated by dividing total borrowings, less cash or cash equivalents, by shareholders’ funds expressed as a percentage.

I

Individual Savings Account (ISA)

Individual Savings Account or ISAs are savings accounts that act as tax efficient wrappers around your investments, sheltering them from income tax and capital gains. They allow a wide range of investments including cash deposits, shares, bonds and investment funds. However, there is a limit to how much you can invest in an ISA each year.

Investment Manager or AAM

Aberdeen Asset Managers Limited is a wholly owned subsidiary of Standard Life Aberdeen plc and acts as the Company’s investment manager

Investment Manager or AAM Asia

Aberdeen Asset Management Asia Limited is a wholly owned subsidiary of Standard Life Aberdeen plc and acts as the Company’s investment manager.

Investment Trust

A type of Closed-End Fund which invests in other securities, allowing shareholders to share the risks, and returns, of collective investment.

ISA Wrapper

The product structure through which an ISA holding achieves its tax benefits.

K

Key Information Document or KID

The Packaged Retail and Insurance-based Investment Products (“PRIIPS”) Regulation requires the Manager, as the Company’s PRIIP ‘manufacturer’, to prepare a Key Information Document (“KID”) in respect of the Company. This KID must be made available by the Manager to retail investors prior to them making any investment decision and is available via the Company’s website. The Company is not responsible for the information contained in the KID and investors should note that the procedures for calculating the risks, costs and potential returns are prescribed by law. The figures in the KID may not reflect the expected returns for the Company and anticipated performance returns cannot be guaranteed.

L

Leverage

For the purposes of the AIFMD, leverage is any method which increases the Company’s exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company’s exposure and its Net Asset Value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company’s positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

M

Manager, AIFM or AFML

Aberdeen Fund Managers Limited is a wholly owned subsidiary of Standard Life Aberdeen plc and acts as the Alternative Investment Fund Manager for the Company. It is authorised and regulated by the FCA.

Mid price

The 'mid price' is the price you see against a share when you look in the media. It is effectively the average between the buying and selling price in the market.

N

Net Asset Value or NAV

The value of total assets less liabilities. Liabilities for this purpose include current and long-term liabilities. The Net Asset Value divided by the number of shares in issue produces the Net Asset Value per share. The NAV can be shown as cum-income per the Statement of Financial Position or ex-income.

O

Offer Price

The price at which a fund management company will buy units in a unit trust or similar pooled investment.

Ongoing Charges

Ratio of expenses as a percentage of average daily shareholders’ funds calculated as per the AIC’s industry standard method.

P

Performance fees

Some Funds may charge a performance fee. This fee becomes payable only when the Fund outperforms its performance fee benchmark.

Pre-Investment Disclosure Document (“PIDD”)

The AIFM and the Company are required to make certain disclosures available to investors in accordance with the AIFMD. Those disclosures that are required to be made pre-investment are included within a PIDD, which can be found on the Company’s website.

Premium

The amount by which the market price per share of an Investment Trust exceeds the Net Asset Value per share. The premium is normally expressed as a percentage of the Net Asset Value per share.

Price/Earnings Ratio

This is calculated by dividing the market price per share by the earnings per share. The calculation assumes no change in earnings but in practice the multiple reflects the stock market’s view of a company’s prospects and profit growth potential.

Prior Charges

The name given to all borrowings including debentures, loans and overdrafts that are to be used for investment purposes, reciprocal foreign currency loans, currency facilities to the extent that they are drawn down, index linked securities, and all types of preference or preferred capital and the income shares of split capital trusts, irrespective of the time until repayment.

S

Standard Life Aberdeen Group

The Standard Life Aberdeen plc group of companies.

T

Total Assets

Total Assets as per the Statement of Financial Position less current liabilities (before deducting Prior Charges as defined above).

Total Return

Share price Total Return involves reinvesting the net dividend in the month that the share price goes ex dividend. The NAV Total Return involves investing the same net dividend in the NAV of the Company on the date to which that dividend was earned.

Risk warning
Risk warning
The value of investments and the income from them can go down as well as up and you may get back less than the amount invested. The tax benefits relating to ISA investments may not be maintained. Investors should review the relevant Key Information Document (KID) brochure prior to making an investment decision.
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Investor warning: Please be aware of scams that can affect investors. Read the full investor risk warning