Jargon Buster

Are you puzzled by investment language?

Our jargon buster gives clear and concise definitions and explanations of investment terminology.

To view the definitions please select the relevant letter below. Or alternatively search to find the definition and explanation you are looking for.

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Hedge

To protect against risk

Hedge fund

A fund that seeks to generate investment returns by using non-traditional investment strategies, utilising mechanisms such as short selling, gearing, programme trading, arbitrage, and tools such as options, futures, swaps, and forwards (derivatives in general)

Hedging

An operation to secure an investor against a potential loss or to minimise a potential risk by offsetting the exposure to a specific risk by entering a position in an investment with the exact opposite pay-off pattern. The term is often applied to the currency markets (currency hedging)

High yield bond

A bond whose issuer has a credit rating of BB+ or lower with S&P, or Ba1 or lower with Moody"s. They are also known as junk bonds or sub-investment grade bonds

Hurdle rate

The minimum rate of return required before a prerequisite profit is made or a performance fee is paid

Hybrid scheme

A scheme that combines features from both defined benefit and defined contribution schemes

Jargon Buster is intended to assist in the understanding of some of the many technical terms that frequently appear in the pensions world. The definitions are intended as a guide only.

Jargon Buster is provided by Blackrock for visitors to www.napf.co.uk