Glossary

The 80-20 rule, also known as the Pareto Principle, is a familiar saying that asserts that 80% of outcomes happen because of 20% of inputs. The general guiding principle of the rule is that a smaller proportion of items cause a larger proportion of outcomes. In business, a goal of the 80-20 rule is to identify inputs that are potentially the most productive and make them the priority. For instance, once managers identify factors that are critical to their company's success, they should give those factors the most focus.

American Depositary Receipts (ADRs) offer U.S. investors an efficient way to invest in foreign companies, simplifying the process of trading these stocks on American exchanges. They connect global markets by allowing foreign firms to reach American capital while helping U.S. investors buy shares without hassle. However, investing in ADRs includes considerations of pricing, fees, and potential tax implications.

An annuity is a contract that's issued and distributed by an insurance company, meant to provide a guaranteed income. The insurance company pays a fixed or variable amount to the purchaser. These have largely gone out of favour in the UK since pension freedoms. They are still recognised for favourable tax treatment in Portugal & Spain.

An annual return is the return that an investment provides over time. It's expressed as a time-weighted annual percentage. Sources of returns can include dividends, returns of capital, and capital appreciation. The rate of annual return is measured against the initial amount of the investment and it represents a geometric mean rather than a simple arithmetic mean.

Asset management is the practice of investing money on behalf of clients. Asset managers work to increase wealth over time, following a personalized plan that reflects the client's risk tolerance and financial goals.

Asset managers may also be called portfolio managers or financial advisors. Many work independently, while others work for a financial services company such as BlackRock or Fidelity. Robo-advisors are a modern type of asset manager.

An item or group of items owned by an individual or company that can be valued in monetary terms. Real estate,

equipment, inventory, cash accounts, and investments are examples of assets

The process of determining what percentage of assets should be dedicated to specific asset classes. Also the end result of

the process

A group of assets with similar risk and expected return characteristics. Cash, debt instruments, real estate, and equities

are examples of asset classes

Blockchain is a decentralized digital database or ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering. Each "block" contains data, and the blocks are linked in a chronological "chain."

A bond is a fixed-income investment issued by governments or corporations to raise funding

A British citizen living outside of the UK, often requiring specialised financial and tax planning advice for managing investments and retirement savings.

A bull market is a period in which financial market prices are climbing or are anticipated to go up.

A tax on the profit when you sell an asset that has increased in value. In Portugal, specific rules apply to expatriates and investment income.

A professional designation awarded by the Chartered Institute for Securities & Investment (CISI) to those demonstrating high standards of knowledge and professionalism.

The Chartered Institute of Securities and Investments

https://www.cisi.org/cisiweb2/cisi-website/who-we-are

A code of ethics is a set of principles intended to guide professionals in conducting business with honesty and integrity. A code of ethics document may outline the organization’s mission and values, guide on addressing problems, establish ethical principles based on the organization’s core values, and define the standards to which professionals are held. The CISI has a code of ethics designed for each member to adopt to enhance Client outcomes.

Dividing investment funds among a variety of investments with different risk-return characteristics to minimise portfolio

risk

A stock's dividend yield is a ratio showing how much a company pays out in dividends each year relative to its stock price. The reciprocal of the dividend yield is the dividend payout ratio.

A mechanism that allows taxpayers to reduce their tax burden when they are liable to pay tax in two different countries.

Due diligence is the process of carefully examining and verifying information before making a decision or moving forward with a particular action or agreement. It refers to the thorough research and evaluation carried out to confirm the accuracy of information and assess any potential risks before committing to a transaction, agreement, or important decision. In the financial world, due diligence requires an examination of financial records before entering into a proposed transaction with another party.

Some companies seem to have an uncanny ability to fend off rivals and maintain their market dominance year after year. This phenomenon, known as an "economic moat," doesn't just keep rivals at bay but also seems to separate successful firms from those that fail

Similar to shares or stocks, equities are units of ownership in multiple companies

A dividend is a cash payment to shareholders as a reward for investing in company stock or equity shares. Ex-dividend means a company's dividend allocations have been specified. The ex-dividend date or "ex-date" is usually one business day before the record date

An exchange rate is the value at which one currency can be exchanged for another.

The process of understanding and managing financial needs and obligations that arise from living abroad, including investment strategy and tax compliance.

An exchange-traded fund (ETF) pools a group of securities (or shares) into a fund and can be traded like an individual stock on an exchange

A high-net-worth individual (HNWI) is generally defined as someone with more than $1 million in highly liquid asset

The Industrial Revolution was a period of major mechanization and innovation that began in Great Britain during the mid-18th and early 19th centuries and later spread throughout much of the world. The British Industrial Revolution was dominated by the exploitation of coal and iron

The area of tax law that deals with the tax implications of cross-border transactions and investment income.

A collection of financial assets such as stocks, bonds, and real estate that an individual manages to fulfil their financial objectives.

A European Union directive that provides a regulatory framework for investment services in the EEA, enhancing transparency and protection for investors.

Usually just referred to as a fund outside of the U.S. A mutual fund is a vehicle for easily investing in the stock market. The mutual fund pools investors’ money. A professional

fund manager is retained to manage the portfolio, making purchasing decisions based on the type of fund, such as a

growth stock mutual fund. It is one of the most popular vehicles for investing because it doesn’t require a lot of money to

get involved.

Net worth is the monetary value of the assets owned by an individual or business entity after subtracting the total value of their liabilities.

The price-to-earnings (P/E) ratio compares a company's share price with its earnings per share (EPS). Analysts and investors use this to determine the relative value of a company's shares in side-by-side comparisons.

Refers to a collection of investments, such as stocks, bonds, securities, commodities, currencies, real estate, etc., mixed

between low-risk and high-risk, owned by an investor and designed to maximize short-term and long-term returns

Frequently also known as an international portfolio bond or personal portfolio bond) is a life insurance policy or capital redemption contract that acts as a tax-efficient investment wrapper, allowing the holder to select and manage a diversified mix of underlying assets. legally categorised as Personal Portfolio Bonds (PPBs) or offshore investment wrappers, were first established in the United Kingdom during the early 1980s

An offshore portfolio bond specifically written and created to align with allowances catered for in the Portuguese tax code. It offers significant deferred tax savings on income depending on the length of time it has been held. It is a regulated product and a parafiscal charge or stamp duty is imposed by the Portuguese Insurance and Pension Funds Supervisory Authority (Autoridade de Supervisão de Seguros e Fundos de Pensões - ASF). The charge is an indirect tax applied strictly to insurance premiums and top-ups paid into life assurance policies and portfolio bonds where the contract risk or policyholder commitment is located in Portugal. Other fees apply.

Introduced in 2010, A Qualifying Non-UK Pension Scheme (QNUPS) is a form of overseas pension scheme available to British citizens that reside permanently outside of the United Kingdom or who reside in the United Kingdom. If the QNUPS complies with specific HMRC regulations, it will be recognised as a QROPS (Qualifying Recognised Offshore Pension Scheme) which allow individuals to transfer UK based approved pension assets to an overseas based "QROPS". A QNUPS can also allow individuals to invest more into their pensions than the usual UK limit in terms of both annual contributions and overall 'lifetime limit' of fund size. They also offer the ability to hold a flexible range of assets than traditional pensions for example a buy-to-let property portfolio. There is the possibility that these pension arrangements are taxed at an attractive lower rate than would be applicable if the asset were not included in such as pension arrangement. The exact tax treatment is dependent on where the member is tax resident.

The S&P 500 is a stock market index weighted by market capitalization that is made up of 500 of the largest public companies in the United States.

S&P 500 vs S&P 500 Equal Weight Index. The S&P 500 Equal Weight Index (EWI) tracks the same 500 U.S. companies as the standard S&P 500 but weights each stock equally, unlike the market-cap-weighted standard index where large companies dominate; this means smaller S&P 500 constituents have greater influence, reducing concentration risk and tilting exposure towards mid-cap and smaller stocks, with quarterly rebalancing resetting all holdings to the same percentage of the index

A stock is a security resulting in ownership of a company. It’s also referred to as equity. When an investor purchases stock

in a company, he or she gains equity in that company and is entitled to a percentage of the company’s profits. These

investors are called stockholders or shareholders

A strategy for passing on your assets and wealth to beneficiaries in a tax-efficient manner, especially important for expatriates with ties in multiple jurisdictions.

Strategies that help to minimise tax liabilities through legitimate means, ensuring more of your income and returns remain invested or available for use.

The status of being a resident for tax purposes in a particular country, which determines your tax obligations and potential liabilities. Typically connected to (but not the same as) where you have residency rights to live and where you are ‘ordinarily resident’

Acronym for Total Expense Ratio. The TER covers the annual costs of running a fund based on all the known expenses associated with the fund’s operation. Also closely related to OCF and the phrase ‘Underlying Portfolio Cost or fee’ Often overlooked underlying cost of investing. It is the announced cost of the fund or ETF management to manage the investment which typically holds a range of stocks or shares. Even share classes of the same fund can have quite widely varying TERs. Sometimes commissions are paid back to Advisory companies and hidden in side these quoted TERs. Institutional Shares classes are typically the least cost and Retail shares classes are the most expensive. Ingenium Financial utilises Institutional shares classes whenever possible.

A trust is a legal entity with separate and distinct rights, similar to a person or corporation. In a trust, a party known as a trustor gives another party, a trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary.

Trusts can be established to provide legal protection for the trustor’s assets to ensure they are distributed according to their wishes. Additionally, a trust can help an estate avoid taxes and probate. It can protect assets from creditors and dictate the terms of inheritance for beneficiaries. Trust arrangements are typically not respected by countries that adopt Civil Law system, rooted in Roman law and continental European traditions. This includes Portugal & Spain.

A trustee is a person or firm that holds title to property or other assets in a trust and administers them according to the wishes of the trust creator.

A pension arrangement typically has an appointed Trustee and it is typically a large corporate entity with many pension Clients.

A trustee may be appointed for various purposes, such as to manage a trust created by a grantor after the grantor dies (and for bankruptcy, certain types of retirement plans or pensions, or to manage assets for someone like a minor).

Trustees have a fiduciary responsibility to the trust's beneficiary or beneficiaries. This means a trustee must act in the best interests of the beneficiaries as they manage the trust's assets.

The yield of a stock, bond, or other asset is the amount of money its investors are paid. An investment's yield includes the interest it earns and/or the dividends paid to investors.

Yield is expressed as a percentage based on the invested amount, the current market value, or the security's face value. Note that dividend yield is not the same as total return, which reflects any increase in the market value of the asset as well as the dividend payment