Catch up on the latest episode of Trust TV, featuring Job Curtis, Fund Manager of The City of London Investment Trust; and David Smith, Fund Manager of Henderson High Income Trust.



Bond: A debt security issued by a company or a government, used as a way of raising money. The investor buying the bond is effectively lending money to the issuer of the bond. Bonds offer a return to investors in the form of fixed periodic payments, and the eventual return at maturity of the original money invested – the par value. Because of their fixed periodic interest payments, they are also often called fixed income instruments.

Bottom up: Bottom-up fund managers build portfolios by focusing on the analysis of individual securities, in order to identify the best opportunities in their industry or country/region.

Cyclical (stocks): Companies that sell discretionary consumer items, such as cars, or industries highly sensitive to changes in the economy, such as miners. The prices of equities and bonds issued by cyclical companies tend to be strongly affected by ups and downs in the overall economy, when compared to non-cyclical companies.

Dividend: A payment made by a company to its shareholders. The amount is variable, and is paid as a portion of the company’s profits.

Economic cycle: The fluctuation of the economy between expansion (growth) and contraction (recession). It is influenced by many factors including household, government and business spending, trade, technology and central bank policy.

Gearing: A measure of a company’s leverage that shows how far its operations are funded by lenders versus shareholders. It is a measure of the debt level of a company. Within investment trusts it refers to how much money the trust borrows for investment purposes.

Net Asset Value (NAV): The total value of a fund's assets less its liabilities.

Top down: A top-down fund manager builds a portfolio based mainly on the economic environment and asset allocation decisions. This contrasts with an approach based on individual security-specific criteria, known as bottom-up.

Volatility: The rate and extent at which the price of a portfoliosecurity or index, moves up and down. If the price swings up and down with large movements, it has high volatility. If the price moves more slowly and to a lesser extent, it has lower volatility. It is used as a measure of the riskiness of an investment

Yield: The level of income on a security, typically expressed as a percentage rate. For equities, a common measure is the dividend yield, which divides recent dividend payments for each share by the share price. For a bond, this is calculated as the coupon payment divided by the current bond price.

Wasting assets (stranded assets): Assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities.