Scope 1 emissions – Scope 1 are those direct emissions that are owned or controlled by a company.
Securitised – Financial securities that are created by securitising individual loans (debt).
Security – A mutually interchangeable, negotiable financial instrument that holds some type of monetary value. It represents an ownership in a publicly-traded corporation — via stock; a creditor relationship with a governmental body or a corporation — via bond; or rights to ownership via an option.
Secondary market – The capital market where previously issued securities, such as stocks and bonds, are traded among investors.
Secular growth – Occurs when there is a long-lasting and essential shift in an industry or sector leading to substantial growth.
Secular tailwind – A secular tailwind refers to economic trends that unfold over long time horizons that help encourage market growth, in contrast to cyclical factors that limit growth.
Segregated accounts – Segregated bank accounts are accounts that hold the funds of a customer separated from the funds of a FX or brokerage company in the interests of the customer's security. They are designed to achieve specific client investment objectives in an effective and transparent manner.
Share class – Each Capital Group fund has different share classes, such as B and Z. Each share class will have different levels of minimum investment, fees and expenses, and returns will differ.
- “Acc” are accumulating share classes.
- “Inc” are dividend-distributing share classes (either net dividend, “d” or gross dividend “gd”).
- “d” are dividend distributing share classes (net dividends).
- “gd” are dividend-distributing classes (gross dividends).
- “gdh” are dividend-distributing hedged classes (gross dividends).
- “gdm” are dividend-distributing with a monthly frequency (gross dividends).
Sharpe ratio - A measure of risk-adjusted return that represents the excess return of an investment portfolio for holding a riskier asset instead of the risk-free asset.
SICAV – A Société d'investissement à Capital Variable, or SICAV, is a publicly-traded open-end investment fund structure offered in Europe. SICAV funds are similar to open-end mutual funds in the US. Shares in the fund are bought and sold based on the fund's current net asset value.
Small-cap – A publicly traded company with a market value between US$250 million and US$2 billion.
Social bond – Any type of bond instrument where the proceeds are to be exclusively used to finance or re-finance, in part or in full, a new and/or existing eligible social project.
Soft commodities – Generally grown, such as agricultural products. E.g., soybeans, cotton, wheat and coffee.
Sovereign/sovereign investors – Refers to investors that are either sovereign States themselves or are intrinsically linked to a sovereign State, the most common types of which are State-owned enterprises (SOEs) and sovereign wealth funds (SWFs).
Spot rates – The price quoted for immediate settlement on a commodity, a security or a currency. The spot rate, also called 'spot price', is based on the value of an asset at the moment of the quote.
Standard deviation – Standard deviation is calculated after fees and is a measure of how much the returns from an investment can vary from its average return.
Star manager – A portfolio manager running a portfolio by themselves as an individual.
Steady compounders – Companies with high return on invested capital, a high quality franchise and recurring revenues built on intangible assets, and which possess pricing power and low capital intensity.
Stock Exchange Daily Official List (SEDOL) – A seven-character code used to identify unit trusts, investment trusts, insurance-linked securities, and domestic and foreign stocks, trading on the London Stock Exchange and various smaller UK- based exchanges.
Stock lending – The act of loaning a stock, derivative or other security to an investor or firm.
Strategic bond strategy – A strategy of investing across the fixed income spectrum, from corporate bonds to high-yield bonds. With a strategic bond strategy, exposure to different bond types can be increased or decreased, depending on factors including the economic environment.
Structural theme – In investing, structural themes occur as one-off shifts that change an existing economic paradigm. These are typically long-term structural changes driven by powerful forces such as disruptive technologies or changing demographics and consumer behaviour.
Succession planning – A strategy for passing each key roles within a company to someone else in a way that the company continues to operate after the incumbent leader is no longer in control. Succession planning helps ensure that businesses continue to run smoothly after the business’ more senior people move on.
Style – In investing, style refers to the investment approach or objective that an asset manager uses with the ultimate goal of generating returns.
Sustainable Development Goals (SDGs) – A collection of 17 interlinked objectives adopted by the United Nations in 2015 designed as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
Sustainable Finance Disclosure Regulation (SFDR) – A European regulation that lays down harmonized rules for financial market participants on transparency with regard to the integration of sustainability risks and the provision of sustainability-related information for financial products.
Sustainable Finance Disclosure Regulation (SFDR) Article 6 funds – Covers funds that do not integrate the EU criteria for environmentally sustainable economic activities into the investment process and could include stocks currently ineligible for inclusion in ESG funds.
Sustainability bonds – Bonds where the proceeds will be exclusively applied to finance or refinance a combination of both green and social projects.
Sustainability Disclosure Requirements (SDR) – A proposed set of rules that will govern sustainability disclosure requirements for financial market participants in the U.K.
Swaps – A derivative contract traded primarily between businesses or financial institutions outside of exchanges, through which they exchange one financial instruments for another. It usually involves cash flows but the instrument can be almost anything. The swaps are customised to the needs of both parties, and retail investors do not generally engage in swaps.
Synthetic Risk Indicator (SRI) – A summary risk indicator of level of product risk compared to other products. It shows how likely it is the product will lose money because of movements in the markets or because the company will not able to pay you.
Synthetic Risk & Reward Indicator (SRRI) – SRRI is a component of the UCITS KIID and illustrates a fund’s risk and reward profile.