top of page
Sunrise over Mountains
Modern You
Financial Planners
On Demand
Understanding Jargon
F - J

The information in this section is general in nature and is available to you for educational purposes. It should not be considered as personal financial advice. Should you like to know more about the contents in this section, please feel free to contact Modern You for a friendly chat with our advisers.

Understanding financial Jargon F - J


Understanding the lingo can be overwhelming, here are some basic terminologies to help you get an edge on your friends, family and colleagues.


Fair Value
The latest stated value of an investment. This could be based on the market value of the publicly traded securities or, if the investment has already sold, the sale price of the investment.


Financial Leverage
Use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt to debt plus equity.


Fixed interest
Interest paid on investments such as bonds and debentures, paid at a predetermined and unchanging rate for a specified period.


A float is to take a company public by issuing shares to investors outside the company. Once a company is floated its price is quoted on a recognised stock exchange, where ownership can be traded. (Also see “Initial Public Offer”).


A derivative, an obligation to make or take delivery of a specified quantity and quality of an underlying asset at a particular time in the future and at a price agreed when the contract was executed.



Gross Domestic Product. A measurement in dollar terms of aggregate goods and services produced within a particular economy over a year excluding income earned outside the country. Considered one of the main yardsticks of the health and vitality of the particular economy.


Gross National Product. The GDP with the addition of interests, profit and dividends received from abroad. The GNP better reflects the welfare of the population in monetary terms, although it is not as accurate as a guide to the productive performance of the economy as the GDP.



Growth investments
These investments generally include Australian and international shares, direct resources and property investments. These assets are expected to experience capital growth and a degree of risk is involved. See also interest bearing investments.


Taking steps to protect against, or at least reduce, a risk; a form of insurance. The term is common in futures and foreign exchange markets where traders use facilities available to protect themselves against future price or exchange rate variations.


Hybrid security
Term used to describe a complex security consisting of virtually any combination of two or more risk management building blocks bond or note, swap, forward or future, or option. A hybrid listed on a stock exchange is generally one that pays a fixed return similar to a bond while containing the option of being converted into shares in the issuing company.


A low-risk investment management strategy in which, the investor trades according to the performance of a market as a whole, rather than particular stocks or assets.


Industry superannuation
Superannuation resulting from an award or productivity agreement, or a superannuation scheme which covers an entire industry rather than one employer or company.


An increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level.



A term use to define projects or businesses that support the community. These include transport links (eg. toll roads, railways, bridges), transport nodes (eg. airports, shipping ports, bus terminals), essential service delivery (eg. electricity, , telecommunications) and community amenities (eg. hospitals, housing, education, prisons).


Initial Public Offer (IPO)
The first fund-raising from the general public. It generally results in a listing on a stock exchange.



Investment linked fund
Funds directly link the value of the plan’s investments in the fund to the market value of the underlying assets.


Income Tax Assessment Act


bottom of page