Association of British Insurers – the trade association for the UK’s insurance industry. Absolute return

Type of unit in a collective investment scheme where the income is reinvested automatically, thereby increasing the unit price. Active/passive management

A positive alpha is a measure of how much a fund has outperformed its benchmark, and a negative alpha is a measure of how much a fund has underperformed its benchmark. As the benchmark is assumed to have a return of zero any returns over this are often seen as a key measure of the ‘added value’ of an active fund manager. Alternatives

A charge taken from the fund. The charge is expressed as a percentage per annum but is normally taken daily from the fund and is calculated based on the value of funds under management. Normally the fund manager reserves the right to review the level of charge. Annualised volatility

The process of spreading investments among different kinds of asset classes such as equities, bonds, property and money market assets. Asset backed securities (ABS)

This refers to the different types of investments that funds or individuals may invest in, such as equities, bonds, property or money market assets.Asset leasing

A measure against which the performance of a fund is compared. The benchmark could be an index, for example the FTSE 100, or a sector average. The benchmark is usually stipulated when the fund is launched. Beta

The price at which you can sell units of a fund. This term is usually used when a fund has different prices for buying and selling. All Architas funds are single priced.  Please see Offer Price. Blue chip

Also referred to as Fixed Interest Securities. A bond can be issued by either a company or a government and is a way of raising capital. Investors buying a bond are effectively loaning money to the issuer. Most bonds promise to pay a fixed rate of interest for a given period of time, at the end of which the holders are, in most cases, repaid the ca [..]

Total market value of a company, calculated by multiplying the number of shares by the price per share. Companies are usually classified as either large cap, medium cap or small cap. Catastrophe reinsurance