Take Charge of Your Finances

Asset Allocation Mix

The proportion of different asset types (e.g., shares, bonds, properties, cash) that a fund invests in.

An individual who meets the requirements set out by the Monetary Authority of Singapore (MAS) and has opted in to be treated as an Accredited Investor by the bank. Generally has access to a wider range of investment products and requires less regulatory protection than a non-Accredited Investor.

Balanced Fund

A fund that invests across equity and non-equity investments (e.g., bonds and cash) for modest returns. Protects investors against stock market downturns.

Blue Chip Stock

Stock from a company that typically has a large market cap, a sterling reputation, an excellent financial record, and many years of success in the business world. Considered secure investments because they pay out dividends and grow consistently over time.

A type of debt security that is issued by a corporation or company and sold to investors.

Commodities

Refers to energy products like oil, gas, and coal; agricultural products like corn, soy, and canola; and metals like gold, silver, copper, and platinum. Serves as relatively simple financial instruments and trading vehicles that offer diversification in an investment portfolio.

Dollar Cost Averaging

The system of regularly buying of a specific investment at a fixed dollar amount, regardless of the price.

Diversification

A strategy that involves investing in a range of asset classes, geographic regions or industry sectors to spread the risk of one asset underperforming, reduce overall volatility, and increase potential returns over time.

Exchange-Traded Fund (ETF)

A collective fund that tracks a specific index, sector, commodity or asset to replicate its performance. (See also 'Index Fund' and 'Mutual Fund'.)

A type of fund comprising investments made with environmental, social, and governance (ESG) considerations to varying degrees. Also known as 'responsible investments' or 'sustainable investments'.

Fixed Income

Fixed cash flow for investors (e.g., fixed rate interests, fixed rate dividends) from assets or securities.

A term that describes people who are financially healthy based on several characteristics that make them financially secure and capable of achieving their financial goals.

Goal Setting

The act of setting financial goals for the short, mid, and/or long term based on the investor's needs and risk appetite.

Growth Fund

A type of high-risk, high-reward fund that consists of stocks with the potential for a high level of earnings growth. Suitable for investors with a long-term investment horizon and a healthy risk tolerance.

Hedge Fund

A type of managed fund with a limited number of private investors who invest in risky or non-traditional assets.

High-Yield Bond

A type of debt security that pays higher interest to compensate investors because they are deemed more likely to default. (See also 'Junk Bond'.)

HSBC's all-in-one wealth management tool that enables investors to optimise their portfolio and understand relevant investment risks in a comprehensive way.

Having adequate insurance is important because it provides individuals with adequate protection against unexpected financial losses, ensuring peace of mind and security for the future.

Junk Bond

A type of debt security issued by companies or governments which are at high risk of default, either by not paying their interest or repaying their capital at maturity. (See also 'High-Yield Bond'.)

Joint Investment Account

An investment account shared between two or more individuals that allows anyone named on the account to access its funds.

Know Your Customer (KYC)

A standard in the investment industry that ensures investment advisors are able to verify a client's identity and know his/her financial profile.

Knock-In/Knock-Out (KIKO)

Typically refers to the combination of a knock-in option and a knock-out option that allows investors to hedge against fluctuations, as long as the given rate/price remains within the knock-in and knock-out barriers.

Liquidity

The efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price.

Lump Sum Investing

The act of investing one's whole amount of capital in a single transaction, as opposed to regular or monthly investing where investments are made over a period of time.

Mutual Fund

A type of managed fund that pools money from many investors to invest in a variety of assets (e.g., stocks, bonds, securities). (See also 'ETF' and 'Index Fund'.)

Margin Call

A call that occurs when the percentage of an investor's equity in a margin account falls below the broker's required amount. A margin account contains securities bought with a combination of the investor's own money and money borrowed from the broker.

Net Income (NI)

Calculated as revenues minus expenses, interest, and taxes. Used to determine earnings per share.

Net Asset Value (NAV)

The net value of an investment fund's assets less its liabilities, divided by the number of shares outstanding.

Over-the-Counter (OTC) Market

A decentralised market in which participants trade stocks, commodities, currencies and other instruments directly between two parties without a central exchange or broker.

Option

A type of financial instrument known as a derivative that gives the holder the right – but not the obligation – to buy or sell a set quantity or dollar value of a particular asset at a fixed price by a set date.

Primary Market

A market that issues new securities on an exchange. Facilitated by underwriting groups and consists of investment banks.

Price-Earnings (P/E) Ratio

A measure of a company's valuation, where a high P/E ratio suggests that investors are willing to pay a high prices for shares today based on expectations of future earnings growth. Calculated as the current share price of a company divided by its earnings per share.

Quantitative Analysis

The use of mathematical and statistical modelling, measurements, and research to understand the behaviour of financial markets and allow for informed investment decisions.

Quanto Option

An option denominated in a currency other than the currency in which the underlying asset is traded. Payment is determined in one currency and paid in another.

Risk-Free Rate

A theoretical rate of return from an asset with zero-risk. Used as a benchmark to compare the rate of return from riskier assets.

A Regular Savings Plan is a direct debit payment plan that allows you to regularly invest a fixed amount of money into an investment product (usually into unit trusts) of your choice.

The act of investing in securities with the intention of selling them in the short term for a profit.

Investment products where the return is linked to an underlying asset with pre-defined features (e.g., tenor, currency, pay-out calculation).

Treasury Bond

A fixed-interest debt security issued by the US government with a maturity of more than 10 years. Pays periodic interest payments.

Time Horizon

The period of time an investor expects to hold an investment until the money is needed. Largely dictated by one's investment goals and strategies.

Underwriting

The process through which an individual or institution takes on financial risk for a fee. Also known as financing or guaranteeing.

Unrealised Gain/Loss

An unrealised gain is an increase in the value of an asset or investment that an investor has not sold (e.g., open stock position). An unrealised loss is a decrease in the value of an ongoing investment.

Volatility

How much and how quickly market prices move over a given span of time. Increased volatility is often a sign of fear and uncertainty.

Value Investing

An investment strategy that involves picking stocks that appear to be trading for less than their intrinsic or book value.

HSBC's online wealth management tool that allows users to open investment accounts, trade, manage their portfolio, and access relevant research/data.

Weighted Average Cost of Capital (WACC)

The average rate that a company expects to pay to finance its business. Calculated as the average after-tax cost of capital from all sources, including common stocks, preferred stocks, bonds, and other forms of debt.

The global marketplace for the trading of one nation's currency for another.

eXpected Return

The profit or loss that an investor anticipates on an investment that has known historical rates of return.

Yield

The return paid to shareholders in the form of dividends based on the current share price.

'You Only Live Once' (YOLO) Investing

An investment approach where one goes 'all in' on a stock in hopes of making a substantial return.

Z-Score

A numerical measurement that describes a value's relationship to the mean of a group of values. Measured in terms of standard deviations from the mean.

Zero-Coupon Bond

A debt security that does not pay interest but trades at a deep discount. Profit is rendered at maturity when it is redeemed.