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Structured products are investment products where the return is linked to an underlying asset with pre-defined features. These features can include tenor, currency, or payout calculation.
Underlying assets can be equities, interest rates, commodities, mutual funds and foreign currencies.
| Glossary | Definition |
|---|---|
| Accrual Condition | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. |
| American Option/Style | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. |
| Barrier Event | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. |
| Closing Price | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. |
| Coupon | The interest payable to investors, expressed as a percentage of the initial investment amount. |
| Currency Pair | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. |
| Early Redemption/Autocall Feature | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. |
| Equity-Linked Note | A structured note the returns on which are tied to the performance of equities (stocks or indices). |
| European Option/Style | Options that can only be exercised on the Final Valuation Date. |
| Final Valuation Date | The last schedule date when the prices of underlying are assessed to determine the payout or performance of the structured product. |
| Floor/Minimum Redemption Level | The lowest amount an investor can receive at the maturity of a structured investment, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. |
| Initial Price | The market price at the commencement of a structured note used as a reference point. |
| Issue/Settlement Date | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. |
| Issuer | The entity that creates and offers the structured product. |
| Issuer Call | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. |
| Issuer Risk | The risk of the structured product's issuer defaulting on its financial obligations. |
| Knock-in Barrier | A pre-specified level/price at which an option contract becomes active. In a structured note where the investor has sold a 'put' option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. |
| Knock-out Barrier | A pre-specified level/price at which an option contract ceases to exist. |
| Maturity/Redemption Date | The date on which a structured note terminates, and the final payment is made by the issuer. |
| Modified Following – Adjusted (ADJMBC) | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. |
| Modified Following – Unadjusted (MBC) | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month. In such cases the payment date is the first business day preceding the non-business day, ie the actual Settlement Date of the coupon is changed, but the coupon period start and end dates remain unchanged. |
| Non-Call Period | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. |
| Observation Date | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. |
| Participation Rate | The percentage of the Underlying's performance that is passed on to the investor. For example, if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. |
| Principal/Nominal/Notional | The initial amount of money invested in a structured product. |
| Rebate Coupon | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. |
| Redemption at Maturity | Refers to the payment an investor receives at the end of the structured note's term, which may include the principal and any final returns based on the product's terms and the performance of the underlying. |
| Reference Entity | The security or market indicator that a structured product tracks, that is used to determine the product's performance. |
| Spot Price | Market price of the Underlying at any particular time. |
| Strike Level | The price level of the Underlying at which a call or put option is exercised. |
| Tenor | The duration or maturity period of a structured product. |
| Trade Date | Date on which the structured product transaction is executed. |
| Underlying | The asset, index, or rate upon which a structured product's performance is based. |
| Worst Performing Underlying | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. |
| Yield | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. |
| Glossary | Accrual Condition | Accrual Condition |
|---|---|---|
| Definition | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. |
| Glossary | American Option/Style | American Option/Style |
| Definition | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. |
| Glossary | Barrier Event | Barrier Event |
| Definition | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. |
| Glossary | Closing Price | Closing Price |
| Definition | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. |
| Glossary | Coupon | Coupon |
| Definition | The interest payable to investors, expressed as a percentage of the initial investment amount. | The interest payable to investors, expressed as a percentage of the initial investment amount. |
| Glossary | Currency Pair | Currency Pair |
| Definition | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. |
| Glossary | Early Redemption/Autocall Feature | Early Redemption/Autocall Feature |
| Definition | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. |
| Glossary | Equity-Linked Note | Equity-Linked Note |
| Definition | A structured note the returns on which are tied to the performance of equities (stocks or indices). | A structured note the returns on which are tied to the performance of equities (stocks or indices). |
| Glossary | European Option/Style | European Option/Style |
| Definition | Options that can only be exercised on the Final Valuation Date. | Options that can only be exercised on the Final Valuation Date. |
| Glossary | Final Valuation Date | Final Valuation Date |
| Definition | The last schedule date when the prices of underlying are assessed to determine the payout or performance of the structured product. | The last schedule date when the prices of underlying are assessed to determine the payout or performance of the structured product. |
| Glossary | Floor/Minimum Redemption Level | Floor/Minimum Redemption Level |
| Definition | The lowest amount an investor can receive at the maturity of a structured investment, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. | The lowest amount an investor can receive at the maturity of a structured investment, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. |
| Glossary | Initial Price | Initial Price |
| Definition | The market price at the commencement of a structured note used as a reference point. | The market price at the commencement of a structured note used as a reference point. |
| Glossary | Issue/Settlement Date | Issue/Settlement Date |
| Definition | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. |
| Glossary | Issuer | Issuer |
| Definition | The entity that creates and offers the structured product. | The entity that creates and offers the structured product. |
| Glossary | Issuer Call | Issuer Call |
| Definition | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. |
| Glossary | Issuer Risk | Issuer Risk |
| Definition |
The risk of the structured product's issuer defaulting on its financial obligations. |
The risk of the structured product's issuer defaulting on its financial obligations. |
| Glossary | Knock-in Barrier | Knock-in Barrier |
| Definition | A pre-specified level/price at which an option contract becomes active. In a structured note where the investor has sold a 'put' option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. | A pre-specified level/price at which an option contract becomes active. In a structured note where the investor has sold a 'put' option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. |
| Glossary | Knock-out Barrier | Knock-out Barrier |
| Definition | A pre-specified level/price at which an option contract ceases to exist. | A pre-specified level/price at which an option contract ceases to exist. |
| Glossary | Maturity/Redemption Date | Maturity/Redemption Date |
| Definition | The date on which a structured note terminates, and the final payment is made by the issuer. | The date on which a structured note terminates, and the final payment is made by the issuer. |
| Glossary | Modified Following – Adjusted (ADJMBC) | Modified Following – Adjusted (ADJMBC) |
| Definition | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. |
| Glossary | Modified Following – Unadjusted (MBC) | Modified Following – Unadjusted (MBC) |
| Definition | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month. In such cases the payment date is the first business day preceding the non-business day, ie the actual Settlement Date of the coupon is changed, but the coupon period start and end dates remain unchanged. | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month. In such cases the payment date is the first business day preceding the non-business day, ie the actual Settlement Date of the coupon is changed, but the coupon period start and end dates remain unchanged. |
| Glossary | Non-Call Period | Non-Call Period |
| Definition | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. |
| Glossary | Observation Date | Observation Date |
| Definition | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. |
| Glossary | Participation Rate | Participation Rate |
| Definition | The percentage of the Underlying's performance that is passed on to the investor. For example, if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. | The percentage of the Underlying's performance that is passed on to the investor. For example, if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. |
| Glossary | Principal/Nominal/Notional | Principal/Nominal/Notional |
| Definition | The initial amount of money invested in a structured product. | The initial amount of money invested in a structured product. |
| Glossary | Rebate Coupon | Rebate Coupon |
| Definition | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. |
| Glossary | Redemption at Maturity | Redemption at Maturity |
| Definition | Refers to the payment an investor receives at the end of the structured note's term, which may include the principal and any final returns based on the product's terms and the performance of the underlying. | Refers to the payment an investor receives at the end of the structured note's term, which may include the principal and any final returns based on the product's terms and the performance of the underlying. |
| Glossary | Reference Entity | Reference Entity |
| Definition | The security or market indicator that a structured product tracks, that is used to determine the product's performance. | The security or market indicator that a structured product tracks, that is used to determine the product's performance. |
| Glossary | Spot Price | Spot Price |
| Definition | Market price of the Underlying at any particular time. | Market price of the Underlying at any particular time. |
| Glossary | Strike Level | Strike Level |
| Definition | The price level of the Underlying at which a call or put option is exercised. | The price level of the Underlying at which a call or put option is exercised. |
| Glossary | Tenor | Tenor |
| Definition | The duration or maturity period of a structured product. | The duration or maturity period of a structured product. |
| Glossary | Trade Date | Trade Date |
| Definition | Date on which the structured product transaction is executed. | Date on which the structured product transaction is executed. |
| Glossary | Underlying | Underlying |
| Definition | The asset, index, or rate upon which a structured product's performance is based. | The asset, index, or rate upon which a structured product's performance is based. |
| Glossary | Worst Performing Underlying | Worst Performing Underlying |
| Definition | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. |
| Glossary | Yield | Yield |
| Definition | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. |
HSBC's Dual Currency Plus (DCP) is an investment product that allows you to invest in two currencies of your choice and enhance your potential returns depending on the foreign exchange movements.
| Glossary | Definition |
|---|---|
| Base Currency | Means in relation to each investment in Dual Currency Plus, the currency in which the investment is denominated when received by the bank, as set out in the relevant Term Sheet. |
| Business Day | Means a day (other than a public holiday or a Saturday or a Sunday) on which banks are open for business (including dealings in foreign currency) in Singapore and in the principal banking centres of the country/region of issuance of the Base Currency and the Linked Currency. |
| Conversion Rate | Means in relation to each Investment in Dual Currency Plus, the exchange rate which is predetermined by the customer and agreed to by the bank between the Base Currency and Linked Currency, specified as such in the relevant Term Sheet. |
| Final Exchange Rate | Means in relation to each investment in Dual Currency Plus, the Exchange Rate between the Base Currency and Linked Currency as quoted by the bank, at approximately the Fixing Time on the Fixing Date. |
| Fixing Date | Means in relation to each investment in Dual Currency Plus, the date set out in the relevant Term Sheet. |
| Fixing Time | Means in relation to each investment in Dual Currency Plus, the time set out in the relevant Term Sheet. |
| Investment Period | Means in relation to each investment in Dual Currency Plus, the period from and including the Start Date to but excluding the Investment Period End Date. |
| Investment Period End Date | Means in relation to each investment in Dual Currency Plus, the Maturity Date as specified in the relevant Term Sheet (and for the purpose of this definition, no adjustment to the Maturity Date as contemplated in the definition of “Maturity Date” set out below shall be made). |
| Investment Year | Means the number of days in a year for the purpose of calculating the return on Investment as determined by the bank for the Base Currency. |
| Linked Currency | Means in relation to each investment in Dual Currency Plus, such currency other than the Base Currency selected by the customer specified as such in the relevant Term Sheet. |
| Maturity Date | Means in relation to each investment in Dual Currency Plus, the date of maturity of such investment as agreed by the bank and the Customer and set out in the relevant Term Sheet and if such a date does not fall on a Business Day, the next following date which is a Business Day. |
| Return on Investment | Means in relation to each investment in Dual Currency Plus, the rate of return on investment specified in the relevant Term Sheet. |
| Start Date | Means in relation to each investment in Dual Currency Plus, the date specified as such in the relevant Term Sheet. |
| Glossary | Base Currency | Base Currency |
|---|---|---|
| Definition | Means in relation to each investment in Dual Currency Plus, the currency in which the investment is denominated when received by the bank, as set out in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, the currency in which the investment is denominated when received by the bank, as set out in the relevant Term Sheet. |
| Glossary | Business Day | Business Day |
| Definition | Means a day (other than a public holiday or a Saturday or a Sunday) on which banks are open for business (including dealings in foreign currency) in Singapore and in the principal banking centres of the country/region of issuance of the Base Currency and the Linked Currency. | Means a day (other than a public holiday or a Saturday or a Sunday) on which banks are open for business (including dealings in foreign currency) in Singapore and in the principal banking centres of the country/region of issuance of the Base Currency and the Linked Currency. |
| Glossary | Conversion Rate | Conversion Rate |
| Definition | Means in relation to each Investment in Dual Currency Plus, the exchange rate which is predetermined by the customer and agreed to by the bank between the Base Currency and Linked Currency, specified as such in the relevant Term Sheet. | Means in relation to each Investment in Dual Currency Plus, the exchange rate which is predetermined by the customer and agreed to by the bank between the Base Currency and Linked Currency, specified as such in the relevant Term Sheet. |
| Glossary | Final Exchange Rate | Final Exchange Rate |
| Definition | Means in relation to each investment in Dual Currency Plus, the Exchange Rate between the Base Currency and Linked Currency as quoted by the bank, at approximately the Fixing Time on the Fixing Date. | Means in relation to each investment in Dual Currency Plus, the Exchange Rate between the Base Currency and Linked Currency as quoted by the bank, at approximately the Fixing Time on the Fixing Date. |
| Glossary | Fixing Date | Fixing Date |
| Definition | Means in relation to each investment in Dual Currency Plus, the date set out in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, the date set out in the relevant Term Sheet. |
| Glossary | Fixing Time | Fixing Time |
| Definition | Means in relation to each investment in Dual Currency Plus, the time set out in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, the time set out in the relevant Term Sheet. |
| Glossary | Investment Period | Investment Period |
| Definition | Means in relation to each investment in Dual Currency Plus, the period from and including the Start Date to but excluding the Investment Period End Date. | Means in relation to each investment in Dual Currency Plus, the period from and including the Start Date to but excluding the Investment Period End Date. |
| Glossary | Investment Period End Date | Investment Period End Date |
| Definition | Means in relation to each investment in Dual Currency Plus, the Maturity Date as specified in the relevant Term Sheet (and for the purpose of this definition, no adjustment to the Maturity Date as contemplated in the definition of “Maturity Date” set out below shall be made). | Means in relation to each investment in Dual Currency Plus, the Maturity Date as specified in the relevant Term Sheet (and for the purpose of this definition, no adjustment to the Maturity Date as contemplated in the definition of “Maturity Date” set out below shall be made). |
| Glossary | Investment Year | Investment Year |
| Definition | Means the number of days in a year for the purpose of calculating the return on Investment as determined by the bank for the Base Currency. | Means the number of days in a year for the purpose of calculating the return on Investment as determined by the bank for the Base Currency. |
| Glossary | Linked Currency | Linked Currency |
| Definition | Means in relation to each investment in Dual Currency Plus, such currency other than the Base Currency selected by the customer specified as such in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, such currency other than the Base Currency selected by the customer specified as such in the relevant Term Sheet. |
| Glossary | Maturity Date | Maturity Date |
| Definition | Means in relation to each investment in Dual Currency Plus, the date of maturity of such investment as agreed by the bank and the Customer and set out in the relevant Term Sheet and if such a date does not fall on a Business Day, the next following date which is a Business Day. | Means in relation to each investment in Dual Currency Plus, the date of maturity of such investment as agreed by the bank and the Customer and set out in the relevant Term Sheet and if such a date does not fall on a Business Day, the next following date which is a Business Day. |
| Glossary | Return on Investment | Return on Investment |
| Definition | Means in relation to each investment in Dual Currency Plus, the rate of return on investment specified in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, the rate of return on investment specified in the relevant Term Sheet. |
| Glossary | Start Date | Start Date |
| Definition | Means in relation to each investment in Dual Currency Plus, the date specified as such in the relevant Term Sheet. | Means in relation to each investment in Dual Currency Plus, the date specified as such in the relevant Term Sheet. |
Bonds/fixed income instruments are a form of loan to the issuer with various tenors that can go up to 30 years. Depending on market liquidity, you can buy or sell bonds/fixed income instruments at any point in time. These are typically used for income generation, cash flow management, and investment portfolio diversification.
| Glossary | Definition |
|---|---|
| Callable Bonds | The bond issuer can buy back the bonds earlier than the maturity date, paying investors the call price (usually the face value of the bonds), together with accrued interest to date. |
| Convertible Bonds | These corporate bonds may be converted into shares of the issuing company’s stock prior to maturity. |
| Corporate Bonds | Corporate bonds are issued by public and private companies to fund day-to-day operations, expand production, fund research or to finance acquisitions. |
| Coupon | The rate of interest that the bond issuer pays its bondholders. Using a SGD1,000 example, if a bond has a 3% coupon, the bond issuer promises to pay investors SGD30 per year until the bond’s maturity date (3% of SGD1,000 par value = SGD30 per annum). |
| Current Yield | The current yield of a bond is the annual interest payments of the bond divided by the bond's current market price. |
| Maturity | The date when the issuer of a bond or debt obligation repays the principal (the original amount invested). Bonds have short, medium or long maturities. |
| Par Value | The amount a bond will be worth at maturity, also known as face value. A bond’s par value is also the basis for calculating interest payments due to bondholders. Most commonly bonds have a par value of SGD1,000. |
| Perpetuals | A perpetual has no maturity date and the Issuer pays coupons on perpetuals forever, unless the perpetual has a callable feature and is redeemed by the Issuer. |
| Puttable Bonds | Bond investors have the option to redeem a puttable bond – also known as a put bond – earlier than the maturity date. Put bonds can offer single or several different dates where investors can exercise the early redemption option. |
| Quasi-Sovereign Bonds | Quasi-Sovereign bonds are issued by Quasi-Sovereign entities with full or partial government ownership or control, a special charter, or a public policy mandate from the national, regional or local government. |
| Ratings | Ratings agencies assign ratings to bonds and bond issuers, based on their creditworthiness. Bond ratings help investors understand the risk of investing in bonds. Investment-grade bonds have ratings of BBB or better. |
| Sovereign/Government Bonds | Government bonds are issued by the government. They are commonly known as treasuries. Money raised from the sale of treasuries funds various aspect of government activity. |
| Supranational Bonds | Supranational bonds are issued by organisations formed by two or more central governments to promote economic development for member countries. Some examples of Supranationals are Asian Development Bank, World Bank, European Investment Bank. |
| Total Loss Absorbing Capacity (TLAC) Bonds | Total Loss Absorbing Capacity (TLAC) bonds were introduced to ensure that global systemically important banks (G-SIBs) have enough equity and bail-in debt to pass losses to investors and minimise the risk of a government bailout.
The bonds are issued by financial institutions and can be written down to zero in terms of value, or converted into equity, so as to reduce the Issuer's debt, thereby shoring up its balance sheet.
TLAC instruments consist of regulatory capital (Common Equity Tier 1 (CET1), Additional Tier 1 (AT1) and Tier 2 (T2)), as well as other eligible debt instruments. There are generally 3 stages in the financial position of a bank where loss absorption is applied:
|
| Yield to Call | The total return that will be received if the bond purchased is held only until its call date instead of full maturity. |
| Yield to Maturity | This is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity, with all payments made as scheduled and reinvested at the same rate. |
| Yield to Worst | The worst possible yield for a bond without the issuer of the bond going into default. |
| Zero-Coupon Bonds | Zero-coupon bonds do not make periodic interest payments. Instead, bond investors buy zero-coupon bonds at a discount to their face value and are repaid the full face value at maturity. |
| Glossary | Callable Bonds | Callable Bonds |
|---|---|---|
| Definition | The bond issuer can buy back the bonds earlier than the maturity date, paying investors the call price (usually the face value of the bonds), together with accrued interest to date. | The bond issuer can buy back the bonds earlier than the maturity date, paying investors the call price (usually the face value of the bonds), together with accrued interest to date. |
| Glossary | Convertible Bonds | Convertible Bonds |
| Definition | These corporate bonds may be converted into shares of the issuing company’s stock prior to maturity. | These corporate bonds may be converted into shares of the issuing company’s stock prior to maturity. |
| Glossary | Corporate Bonds | Corporate Bonds |
| Definition | Corporate bonds are issued by public and private companies to fund day-to-day operations, expand production, fund research or to finance acquisitions. | Corporate bonds are issued by public and private companies to fund day-to-day operations, expand production, fund research or to finance acquisitions. |
| Glossary | Coupon | Coupon |
| Definition | The rate of interest that the bond issuer pays its bondholders. Using a SGD1,000 example, if a bond has a 3% coupon, the bond issuer promises to pay investors SGD30 per year until the bond’s maturity date (3% of SGD1,000 par value = SGD30 per annum). | The rate of interest that the bond issuer pays its bondholders. Using a SGD1,000 example, if a bond has a 3% coupon, the bond issuer promises to pay investors SGD30 per year until the bond’s maturity date (3% of SGD1,000 par value = SGD30 per annum). |
| Glossary | Current Yield | Current Yield |
| Definition | The current yield of a bond is the annual interest payments of the bond divided by the bond's current market price. | The current yield of a bond is the annual interest payments of the bond divided by the bond's current market price. |
| Glossary | Maturity | Maturity |
| Definition | The date when the issuer of a bond or debt obligation repays the principal (the original amount invested). Bonds have short, medium or long maturities. | The date when the issuer of a bond or debt obligation repays the principal (the original amount invested). Bonds have short, medium or long maturities. |
| Glossary | Par Value | Par Value |
| Definition | The amount a bond will be worth at maturity, also known as face value. A bond’s par value is also the basis for calculating interest payments due to bondholders. Most commonly bonds have a par value of SGD1,000. | The amount a bond will be worth at maturity, also known as face value. A bond’s par value is also the basis for calculating interest payments due to bondholders. Most commonly bonds have a par value of SGD1,000. |
| Glossary | Perpetuals | Perpetuals |
| Definition | A perpetual has no maturity date and the Issuer pays coupons on perpetuals forever, unless the perpetual has a callable feature and is redeemed by the Issuer. | A perpetual has no maturity date and the Issuer pays coupons on perpetuals forever, unless the perpetual has a callable feature and is redeemed by the Issuer. |
| Glossary | Puttable Bonds | Puttable Bonds |
| Definition | Bond investors have the option to redeem a puttable bond – also known as a put bond – earlier than the maturity date. Put bonds can offer single or several different dates where investors can exercise the early redemption option. | Bond investors have the option to redeem a puttable bond – also known as a put bond – earlier than the maturity date. Put bonds can offer single or several different dates where investors can exercise the early redemption option. |
| Glossary | Quasi-Sovereign Bonds | Quasi-Sovereign Bonds |
| Definition | Quasi-Sovereign bonds are issued by Quasi-Sovereign entities with full or partial government ownership or control, a special charter, or a public policy mandate from the national, regional or local government. | Quasi-Sovereign bonds are issued by Quasi-Sovereign entities with full or partial government ownership or control, a special charter, or a public policy mandate from the national, regional or local government. |
| Glossary | Ratings | Ratings |
| Definition | Ratings agencies assign ratings to bonds and bond issuers, based on their creditworthiness. Bond ratings help investors understand the risk of investing in bonds. Investment-grade bonds have ratings of BBB or better. | Ratings agencies assign ratings to bonds and bond issuers, based on their creditworthiness. Bond ratings help investors understand the risk of investing in bonds. Investment-grade bonds have ratings of BBB or better. |
| Glossary | Sovereign/Government Bonds | Sovereign/Government Bonds |
| Definition | Government bonds are issued by the government. They are commonly known as treasuries. Money raised from the sale of treasuries funds various aspect of government activity. | Government bonds are issued by the government. They are commonly known as treasuries. Money raised from the sale of treasuries funds various aspect of government activity. |
| Glossary | Supranational Bonds | Supranational Bonds |
| Definition | Supranational bonds are issued by organisations formed by two or more central governments to promote economic development for member countries. Some examples of Supranationals are Asian Development Bank, World Bank, European Investment Bank. | Supranational bonds are issued by organisations formed by two or more central governments to promote economic development for member countries. Some examples of Supranationals are Asian Development Bank, World Bank, European Investment Bank. |
| Glossary | Total Loss Absorbing Capacity (TLAC) Bonds | Total Loss Absorbing Capacity (TLAC) Bonds |
| Definition |
Total Loss Absorbing Capacity (TLAC) bonds were introduced to ensure that global systemically important banks (G-SIBs) have enough equity and bail-in debt to pass losses to investors and minimise the risk of a government bailout.
The bonds are issued by financial institutions and can be written down to zero in terms of value, or converted into equity, so as to reduce the Issuer's debt, thereby shoring up its balance sheet.
TLAC instruments consist of regulatory capital (Common Equity Tier 1 (CET1), Additional Tier 1 (AT1) and Tier 2 (T2)), as well as other eligible debt instruments. There are generally 3 stages in the financial position of a bank where loss absorption is applied:
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Total Loss Absorbing Capacity (TLAC) bonds were introduced to ensure that global systemically important banks (G-SIBs) have enough equity and bail-in debt to pass losses to investors and minimise the risk of a government bailout.
The bonds are issued by financial institutions and can be written down to zero in terms of value, or converted into equity, so as to reduce the Issuer's debt, thereby shoring up its balance sheet.
TLAC instruments consist of regulatory capital (Common Equity Tier 1 (CET1), Additional Tier 1 (AT1) and Tier 2 (T2)), as well as other eligible debt instruments. There are generally 3 stages in the financial position of a bank where loss absorption is applied:
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| Glossary | Yield to Call | Yield to Call |
| Definition | The total return that will be received if the bond purchased is held only until its call date instead of full maturity. | The total return that will be received if the bond purchased is held only until its call date instead of full maturity. |
| Glossary | Yield to Maturity | Yield to Maturity |
| Definition | This is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity, with all payments made as scheduled and reinvested at the same rate. | This is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity, with all payments made as scheduled and reinvested at the same rate. |
| Glossary | Yield to Worst | Yield to Worst |
| Definition | The worst possible yield for a bond without the issuer of the bond going into default. | The worst possible yield for a bond without the issuer of the bond going into default. |
| Glossary | Zero-Coupon Bonds | Zero-Coupon Bonds |
| Definition | Zero-coupon bonds do not make periodic interest payments. Instead, bond investors buy zero-coupon bonds at a discount to their face value and are repaid the full face value at maturity. | Zero-coupon bonds do not make periodic interest payments. Instead, bond investors buy zero-coupon bonds at a discount to their face value and are repaid the full face value at maturity. |
Our equity trading platform allows you to take advantage of trading opportunities in stocks, Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs) and American Depository Receipts (ADRs) listed in the major markets.
| Glossary | Definition |
|---|---|
| Accrual Condition | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. |
| American Depositary Receipt (ADR) | A negotiable certificate issued by a depositary bank that represents ownership in a non-US company’s deposited equity (i.e., equity held in custody by the depositary bank in the company’s home market). |
| American Option/Style | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. |
| Ask Price | The price at which a dealer will sell a specified quantity of a security. Also called ask, offer price, or offer. |
| Barrier Event | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. |
| Bid Price | In a price quotation, the price at which the party making the quotation is willing to buy a specified quantity of an asset or security. |
| Brokerage Fee | Fee charged by a broker to conduct transactions between buyers and sellers. |
| Closing Price | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. |
| Corporate Action | An event that brings material change to a company and may affect its shareholders in terms of the number of shares they hold, the amount of capital they have invested, or how and where the shares can be traded. |
| Coupon | The interest payable to investors, expressed as a percentage of the initial investment amount. |
| Currency Pair | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. |
| Early Redemption/Autocall Feature | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. |
| Equity-Linked Note | A structured note the returns on which are tied to the performance of equities (stocks or indices). |
| European Option/Style | Options that can only be exercised on the Final Valuation Date. |
| Exchange-Traded Fund (ETF) | Exchange-Traded Funds or ETFs are hybrid investment products with many features of mutual funds combined with the trading features of common stocks or bonds. Essentially, ETFs are typically portfolios of stocks or bonds or commodities that trade throughout the day like common stocks. |
| Final Valuation Date | The last scheduled date when the prices of Underlying are assessed to determine the payout or performance of the structured product. |
| Floor/Minimum Redemption Level | The lowest amount an investor can receive at the maturity of a structured product, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. |
| Global Depository Receipt (GDR) | A depository receipt that is issued outside of the company’s home country and outside of the United States. |
| Initial Price | The market price at the commencement of a structured product's tenor used as a reference point. |
| Issue/Settlement Date | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. |
| Issuer | The entity that creates and offers the structured product. |
| Issuer Call | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. |
| Issuer Risk | The risk of the structured product's issuer defaulting on its financial obligations. |
| Knock-in Barrier | A pre-specified level/price at which an option contract becomes active. In a structured product where the investor has sold a “put” option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. |
| Knock-out Barrier | A pre-specified level/price at which an option contract ceases to exist. |
| Limit Order | An instruction to execute an order when the best price available is at least as good as the limit price specified in the order. |
| Market Order | An instruction to execute an order as soon as possible in the public markets at the best price available. |
| Maturity/Redemption Date | The date on which a structured product terminates, and the final payment is made by the issuer. |
| Modified Following – Adjusted (ADJMBC) | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. |
| Modified Following – Unadjusted (MBC) | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month; in such cases the payment date is the first business day preceding the non-business day. i.e., the actual settlement date of the coupon is changed, but the coupon period start and end dates remain unchanged. |
| Non-Call Period | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. |
| Observation Date | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. |
| Participation Rate | The percentage of the Underlying's performance that is passed on to the investor. E.g., if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. |
| Price Quote | The price at which a certain stock or security is quoted on an exchange. |
| Principal/Nominal/Notional | The initial amount of money invested in a structured product. |
| Real Estate Investment Trust (REIT) | Publicly traded equities representing pools of money invested in real estate properties and/or real estate debt. |
| Rebate Coupon | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. |
| Redemption at Maturity | Refers to the payment an investor receives at the end of the structured product's term, which may include the principal and any final returns based on the product's terms and the performance of the Underlying. |
| Reference Entity | The security or market indicator that a structured product tracks, that is used to determine the product's performance. |
| Settlement Date |
Date when the buyer makes a cash payment and the seller delivers the security. |
| Spot Price | Market price of the Underlying at any particular time. |
| Strike Level | The price level of the Underlying at which a call or put option is exercised. |
| Tenor | The duration or maturity period of a structured product. |
| Trade Date | Date when an order is executed in the market. |
| Underlying | The asset, index, or rate upon which a structured product's performance is based. |
| Worst Performing Underlying | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. |
| Yield | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. |
| Glossary | Accrual Condition | Accrual Condition |
|---|---|---|
| Definition | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. | A predefined rule that determines if and how coupon payments accumulate based on the Underlying's performance. |
| Glossary | American Depositary Receipt (ADR) | American Depositary Receipt (ADR) |
| Definition | A negotiable certificate issued by a depositary bank that represents ownership in a non-US company’s deposited equity (i.e., equity held in custody by the depositary bank in the company’s home market). | A negotiable certificate issued by a depositary bank that represents ownership in a non-US company’s deposited equity (i.e., equity held in custody by the depositary bank in the company’s home market). |
| Glossary | American Option/Style | American Option/Style |
| Definition | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. | Options that can be exercised at any time from the Trade Date to the Final Valuation Date. |
| Glossary | Ask Price | Ask Price |
| Definition | The price at which a dealer will sell a specified quantity of a security. Also called ask, offer price, or offer. | The price at which a dealer will sell a specified quantity of a security. Also called ask, offer price, or offer. |
| Glossary | Barrier Event | Barrier Event |
| Definition | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. | Occurs when the price of an Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) closes below or above a pre-specified level of lower and upper Barriers. |
| Glossary | Bid Price | Bid Price |
| Definition | In a price quotation, the price at which the party making the quotation is willing to buy a specified quantity of an asset or security. | In a price quotation, the price at which the party making the quotation is willing to buy a specified quantity of an asset or security. |
| Glossary | Brokerage Fee | Brokerage Fee |
| Definition | Fee charged by a broker to conduct transactions between buyers and sellers. | Fee charged by a broker to conduct transactions between buyers and sellers. |
| Glossary | Closing Price | Closing Price |
| Definition | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. | Final price of the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) at the end of a trading day, used to determine performance or trigger conditions in structured products. |
| Glossary | Corporate Action | Corporate Action |
| Definition | An event that brings material change to a company and may affect its shareholders in terms of the number of shares they hold, the amount of capital they have invested, or how and where the shares can be traded. | An event that brings material change to a company and may affect its shareholders in terms of the number of shares they hold, the amount of capital they have invested, or how and where the shares can be traded. |
| Glossary | Coupon | Coupon |
| Definition | The interest payable to investors, expressed as a percentage of the initial investment amount. | The interest payable to investors, expressed as a percentage of the initial investment amount. |
| Glossary | Currency Pair | Currency Pair |
| Definition | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. | Quotation of two different currencies, with the value of one currency being quoted against the other. If the USD is valued against the SGD, the currency pair is USD/SGD, and it indicates how much SGD is exchangeable for 1 USD. |
| Glossary | Early Redemption/Autocall Feature | Early Redemption/Autocall Feature |
| Definition | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. | A feature that allows a structured product to automatically terminate before maturity if the Underlying (in a basket of Underlyings, this refers to the worst performing Underlying in the basket) meets or exceeds a specified level on pre-defined observation dates. |
| Glossary | Equity-Linked Note | Equity-Linked Note |
| Definition | A structured note the returns on which are tied to the performance of equities (stocks or indices). | A structured note the returns on which are tied to the performance of equities (stocks or indices). |
| Glossary | European Option/Style | European Option/Style |
| Definition | Options that can only be exercised on the Final Valuation Date. | Options that can only be exercised on the Final Valuation Date. |
| Glossary | Exchange-Traded Fund (ETF) | Exchange-Traded Fund (ETF) |
| Definition | Exchange-Traded Funds or ETFs are hybrid investment products with many features of mutual funds combined with the trading features of common stocks or bonds. Essentially, ETFs are typically portfolios of stocks or bonds or commodities that trade throughout the day like common stocks. | Exchange-Traded Funds or ETFs are hybrid investment products with many features of mutual funds combined with the trading features of common stocks or bonds. Essentially, ETFs are typically portfolios of stocks or bonds or commodities that trade throughout the day like common stocks. |
| Glossary | Final Valuation Date | Final Valuation Date |
| Definition | The last scheduled date when the prices of Underlying are assessed to determine the payout or performance of the structured product. | The last scheduled date when the prices of Underlying are assessed to determine the payout or performance of the structured product. |
| Glossary | Floor/Minimum Redemption Level | Floor/Minimum Redemption Level |
| Definition | The lowest amount an investor can receive at the maturity of a structured product, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. | The lowest amount an investor can receive at the maturity of a structured product, regardless of the performance of the Underlying asset. This level is typically expressed as a percentage of the initial investment or principal. |
| Glossary | Global Depository Receipt (GDR) | Global Depository Receipt (GDR) |
| Definition | A depository receipt that is issued outside of the company’s home country and outside of the United States. | A depository receipt that is issued outside of the company’s home country and outside of the United States. |
| Glossary | Initial Price | Initial Price |
| Definition | The market price at the commencement of a structured product's tenor used as a reference point. | The market price at the commencement of a structured product's tenor used as a reference point. |
| Glossary | Issue/Settlement Date | Issue/Settlement Date |
| Definition | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. | Date on which the investor pays the initial investment amount (principal) to the issuer, and the issuer assumes the obligation to fulfill the terms of the structured product. |
| Glossary | Issuer | Issuer |
| Definition | The entity that creates and offers the structured product. | The entity that creates and offers the structured product. |
| Glossary | Issuer Call | Issuer Call |
| Definition | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. | A feature that gives the issuer the right to redeem the structured product before the maturity date, typically on pre-defined dates. |
| Glossary | Issuer Risk | Issuer Risk |
| Definition | The risk of the structured product's issuer defaulting on its financial obligations. | The risk of the structured product's issuer defaulting on its financial obligations. |
| Glossary | Knock-in Barrier | Knock-in Barrier |
| Definition | A pre-specified level/price at which an option contract becomes active. In a structured product where the investor has sold a “put” option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. | A pre-specified level/price at which an option contract becomes active. In a structured product where the investor has sold a “put” option to the issuer, the issuer can exercise the put option if the Underlying asset's price reaches the Knock-in barrier. |
| Glossary | Knock-out Barrier | Knock-out Barrier |
| Definition | A pre-specified level/price at which an option contract ceases to exist. | A pre-specified level/price at which an option contract ceases to exist. |
| Glossary | Limit Order | Limit Order |
| Definition | An instruction to execute an order when the best price available is at least as good as the limit price specified in the order. | An instruction to execute an order when the best price available is at least as good as the limit price specified in the order. |
| Glossary | Market Order | Market Order |
| Definition | An instruction to execute an order as soon as possible in the public markets at the best price available. | An instruction to execute an order as soon as possible in the public markets at the best price available. |
| Glossary | Maturity/Redemption Date | Maturity/Redemption Date |
| Definition | The date on which a structured product terminates, and the final payment is made by the issuer. | The date on which a structured product terminates, and the final payment is made by the issuer. |
| Glossary | Modified Following – Adjusted (ADJMBC) | Modified Following – Adjusted (ADJMBC) |
| Definition | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. | Means if a coupon is scheduled to pay on a non-business day, the coupon period end date is adjusted to include the next business day, unless the next business day falls in the next calendar month. In such cases, the coupon end date will be adjusted back to the first business day preceding the non-business day. The investor is compensated for the extra days of interest accrued if the coupon is paid on the next business day, or not compensated if the coupon is paid earlier. |
| Glossary | Modified Following – Unadjusted (MBC) | Modified Following – Unadjusted (MBC) |
| Definition | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month; in such cases the payment date is the first business day preceding the non-business day. i.e., the actual settlement date of the coupon is changed, but the coupon period start and end dates remain unchanged. | Means if a coupon is scheduled to pay on a non-business day, the coupon is paid on the next business day, unless the next business day falls in the next calendar month; in such cases the payment date is the first business day preceding the non-business day. i.e., the actual settlement date of the coupon is changed, but the coupon period start and end dates remain unchanged. |
| Glossary | Non-Call Period | Non-Call Period |
| Definition | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. | The period following the Trade Date during which callable structured products are not eligible to be called for redemption. |
| Glossary | Observation Date | Observation Date |
| Definition | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. | A scheduled date during the life of the structured product when the performance of the Underlying is assessed. These assessments are used to determine where certain conditions, such as coupon payments, early redemption, or barrier events, have been met. |
| Glossary | Participation Rate | Participation Rate |
| Definition | The percentage of the Underlying's performance that is passed on to the investor. E.g., if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. | The percentage of the Underlying's performance that is passed on to the investor. E.g., if a product has a participation rate of 80%, the investor receives 80% of the gains or losses of the Underlying. |
| Glossary | Price Quote | Price Quote |
| Definition | The price at which a certain stock or security is quoted on an exchange. | The price at which a certain stock or security is quoted on an exchange. |
| Glossary | Principal/Nominal/Notional | Principal/Nominal/Notional |
| Definition | The initial amount of money invested in a structured product. | The initial amount of money invested in a structured product. |
| Glossary | Real Estate Investment Trust (REIT) | Real Estate Investment Trust (REIT) |
| Definition | Publicly traded equities representing pools of money invested in real estate properties and/or real estate debt. | Publicly traded equities representing pools of money invested in real estate properties and/or real estate debt. |
| Glossary | Rebate Coupon | Rebate Coupon |
| Definition | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. | The interest payable to investors, expressed as a percentage of the initial investment amount at Maturity if a Barrier Event occurs. |
| Glossary | Redemption at Maturity | Redemption at Maturity |
| Definition | Refers to the payment an investor receives at the end of the structured product's term, which may include the principal and any final returns based on the product's terms and the performance of the Underlying. | Refers to the payment an investor receives at the end of the structured product's term, which may include the principal and any final returns based on the product's terms and the performance of the Underlying. |
| Glossary | Reference Entity | Reference Entity |
| Definition | The security or market indicator that a structured product tracks, that is used to determine the product's performance. | The security or market indicator that a structured product tracks, that is used to determine the product's performance. |
| Glossary | Settlement Date | Settlement Date |
| Definition |
Date when the buyer makes a cash payment and the seller delivers the security. |
Date when the buyer makes a cash payment and the seller delivers the security. |
| Glossary | Spot Price | Spot Price |
| Definition | Market price of the Underlying at any particular time. | Market price of the Underlying at any particular time. |
| Glossary | Strike Level | Strike Level |
| Definition | The price level of the Underlying at which a call or put option is exercised. | The price level of the Underlying at which a call or put option is exercised. |
| Glossary | Tenor | Tenor |
| Definition | The duration or maturity period of a structured product. | The duration or maturity period of a structured product. |
| Glossary | Trade Date | Trade Date |
| Definition | Date when an order is executed in the market. | Date when an order is executed in the market. |
| Glossary | Underlying | Underlying |
| Definition | The asset, index, or rate upon which a structured product's performance is based. | The asset, index, or rate upon which a structured product's performance is based. |
| Glossary | Worst Performing Underlying | Worst Performing Underlying |
| Definition | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. | The single asset in a basket of Underlying that experiences the largest decline (or the lowest relative performance) from its initial price. |
| Glossary | Yield | Yield |
| Definition | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. | The income or return earned from the structured product, usually expressed in percentage relative to the initial investment. |
Starting from a small investment sum, unit trusts (or mutual funds) allow you to access a diversified portfolio of securities, bonds, currencies and/or commodities around the world. This is done by pooling your money with other investors for investments to be made by a fund manager.
| Glossary | Definition |
|---|---|
| Asset Allocation | The allocation of funds held on behalf of an investor to various categories of assets such as equities, bonds and others based on their investment objectives. |
| AUM (Assets Under Management) | The total market value of the assets that a financial institution or fund manager manages on behalf of customers. |
| Benchmark | A standard against which the performance of a security, mutual fund, or investment manager can be measured, typically a broad market index. |
| Beta | A measure of a security or portfolio's volatility in relation to the overall market. A beta greater than 1 indicates more volatility than the market, while less than 1 indicates less volatility. |
| CAGR (Compound Annual Growth Rate) | The annualised growth rate of an investment over a specified period, showing the smoothed rate of return. |
| Developed Markets | Economies with high levels of income per capita, well-established financial markets, advanced infrastructure, and stable political environments. Examples include the United States, Western Europe, Japan, and Australia. Investments in developed markets are generally considered less risky compared to emerging markets but may offer lower growth potential. |
| Discretionary Mandate | An agreement where the client authorises the portfolio manager to make investment decisions on their behalf, following a set of guidelines or investment strategy. |
| Diversification | To invest in a variety of different markets, products and securities to spread the risk of loss. |
| Dividend | A portion of a company's earnings distributed to shareholders, typically in cash or additional shares. |
| Duration | Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. The longer a fund's average duration, the more sensitive the portfolio is to shifts in interest rates. Duration is expressed as a number of years. |
| Emerging Markets | Economies that are in the process of rapid growth and industrialization, typically characterised by lower income levels per capita but higher growth rates compared to developed markets. Examples include countries like China, India, Brazil, and South Africa. Investments in emerging markets may offer higher returns but often come with higher risk due to political instability, currency volatility, and less mature financial markets. |
| Hedge | An investment made to reduce the risk of adverse price movements in an asset, typically by taking an offsetting position in a related security. |
| High-Water Mark | A benchmark that represents the highest peak in value that a fund or portfolio has reached. It is often used to calculate performance fees. |
| NAV (Net Asset Value) | The value per share of a mutual fund or ETF, calculated by dividing the total value of all the securities in the portfolio, minus liabilities, by the number of outstanding shares. |
| Rebalancing | The process of realigning the weightings of a portfolio's assets by periodically buying or selling assets to maintain an original or desired asset allocation. |
| Risk Tolerance | The degree of variability in investment returns that an investor is willing to withstand in their investment portfolio. |
| Sharpe Ratio | A measure used to evaluate the risk-adjusted return of an investment by subtracting the risk-free rate from the return of the portfolio and dividing by the standard deviation. |
| Structured Products | Structured Products are investment products where the return is linked to an underlying asset with pre-defined features (tenor, currency, payout calculation etc.)
Underlying asset can be equities, interest rates, commodities, mutual funds and foreign currencies, among others. |
| Tracking Error | The divergence between the price behaviour of a position or a portfolio and the price behaviour of a benchmark. |
| Volatility | A term for the fluctuation in price of financial instruments over time. |
| Yield | The income returns on an investment, such as the interest or dividends received, usually expressed as an annual percentage. |
| Glossary | Asset Allocation | Asset Allocation |
|---|---|---|
| Definition | The allocation of funds held on behalf of an investor to various categories of assets such as equities, bonds and others based on their investment objectives. | The allocation of funds held on behalf of an investor to various categories of assets such as equities, bonds and others based on their investment objectives. |
| Glossary | AUM (Assets Under Management) | AUM (Assets Under Management) |
| Definition | The total market value of the assets that a financial institution or fund manager manages on behalf of customers. | The total market value of the assets that a financial institution or fund manager manages on behalf of customers. |
| Glossary | Benchmark | Benchmark |
| Definition | A standard against which the performance of a security, mutual fund, or investment manager can be measured, typically a broad market index. | A standard against which the performance of a security, mutual fund, or investment manager can be measured, typically a broad market index. |
| Glossary | Beta | Beta |
| Definition | A measure of a security or portfolio's volatility in relation to the overall market. A beta greater than 1 indicates more volatility than the market, while less than 1 indicates less volatility. | A measure of a security or portfolio's volatility in relation to the overall market. A beta greater than 1 indicates more volatility than the market, while less than 1 indicates less volatility. |
| Glossary | CAGR (Compound Annual Growth Rate) | CAGR (Compound Annual Growth Rate) |
| Definition | The annualised growth rate of an investment over a specified period, showing the smoothed rate of return. | The annualised growth rate of an investment over a specified period, showing the smoothed rate of return. |
| Glossary | Developed Markets | Developed Markets |
| Definition | Economies with high levels of income per capita, well-established financial markets, advanced infrastructure, and stable political environments. Examples include the United States, Western Europe, Japan, and Australia. Investments in developed markets are generally considered less risky compared to emerging markets but may offer lower growth potential. | Economies with high levels of income per capita, well-established financial markets, advanced infrastructure, and stable political environments. Examples include the United States, Western Europe, Japan, and Australia. Investments in developed markets are generally considered less risky compared to emerging markets but may offer lower growth potential. |
| Glossary | Discretionary Mandate | Discretionary Mandate |
| Definition | An agreement where the client authorises the portfolio manager to make investment decisions on their behalf, following a set of guidelines or investment strategy. | An agreement where the client authorises the portfolio manager to make investment decisions on their behalf, following a set of guidelines or investment strategy. |
| Glossary | Diversification | Diversification |
| Definition | To invest in a variety of different markets, products and securities to spread the risk of loss. | To invest in a variety of different markets, products and securities to spread the risk of loss. |
| Glossary | Dividend | Dividend |
| Definition | A portion of a company's earnings distributed to shareholders, typically in cash or additional shares. | A portion of a company's earnings distributed to shareholders, typically in cash or additional shares. |
| Glossary | Duration | Duration |
| Definition | Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. The longer a fund's average duration, the more sensitive the portfolio is to shifts in interest rates. Duration is expressed as a number of years. | Duration is a measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. The longer a fund's average duration, the more sensitive the portfolio is to shifts in interest rates. Duration is expressed as a number of years. |
| Glossary | Emerging Markets | Emerging Markets |
| Definition | Economies that are in the process of rapid growth and industrialization, typically characterised by lower income levels per capita but higher growth rates compared to developed markets. Examples include countries like China, India, Brazil, and South Africa. Investments in emerging markets may offer higher returns but often come with higher risk due to political instability, currency volatility, and less mature financial markets. | Economies that are in the process of rapid growth and industrialization, typically characterised by lower income levels per capita but higher growth rates compared to developed markets. Examples include countries like China, India, Brazil, and South Africa. Investments in emerging markets may offer higher returns but often come with higher risk due to political instability, currency volatility, and less mature financial markets. |
| Glossary | Hedge | Hedge |
| Definition | An investment made to reduce the risk of adverse price movements in an asset, typically by taking an offsetting position in a related security. | An investment made to reduce the risk of adverse price movements in an asset, typically by taking an offsetting position in a related security. |
| Glossary | High-Water Mark | High-Water Mark |
| Definition | A benchmark that represents the highest peak in value that a fund or portfolio has reached. It is often used to calculate performance fees. | A benchmark that represents the highest peak in value that a fund or portfolio has reached. It is often used to calculate performance fees. |
| Glossary | NAV (Net Asset Value) | NAV (Net Asset Value) |
| Definition | The value per share of a mutual fund or ETF, calculated by dividing the total value of all the securities in the portfolio, minus liabilities, by the number of outstanding shares. | The value per share of a mutual fund or ETF, calculated by dividing the total value of all the securities in the portfolio, minus liabilities, by the number of outstanding shares. |
| Glossary | Rebalancing | Rebalancing |
| Definition | The process of realigning the weightings of a portfolio's assets by periodically buying or selling assets to maintain an original or desired asset allocation. | The process of realigning the weightings of a portfolio's assets by periodically buying or selling assets to maintain an original or desired asset allocation. |
| Glossary | Risk Tolerance | Risk Tolerance |
| Definition | The degree of variability in investment returns that an investor is willing to withstand in their investment portfolio. | The degree of variability in investment returns that an investor is willing to withstand in their investment portfolio. |
| Glossary | Sharpe Ratio | Sharpe Ratio |
| Definition | A measure used to evaluate the risk-adjusted return of an investment by subtracting the risk-free rate from the return of the portfolio and dividing by the standard deviation. | A measure used to evaluate the risk-adjusted return of an investment by subtracting the risk-free rate from the return of the portfolio and dividing by the standard deviation. |
| Glossary | Structured Products | Structured Products |
| Definition |
Structured Products are investment products where the return is linked to an underlying asset with pre-defined features (tenor, currency, payout calculation etc.)
Underlying asset can be equities, interest rates, commodities, mutual funds and foreign currencies, among others. |
Structured Products are investment products where the return is linked to an underlying asset with pre-defined features (tenor, currency, payout calculation etc.)
Underlying asset can be equities, interest rates, commodities, mutual funds and foreign currencies, among others. |
| Glossary | Tracking Error | Tracking Error |
| Definition | The divergence between the price behaviour of a position or a portfolio and the price behaviour of a benchmark. | The divergence between the price behaviour of a position or a portfolio and the price behaviour of a benchmark. |
| Glossary | Volatility | Volatility |
| Definition | A term for the fluctuation in price of financial instruments over time. | A term for the fluctuation in price of financial instruments over time. |
| Glossary | Yield | Yield |
| Definition | The income returns on an investment, such as the interest or dividends received, usually expressed as an annual percentage. | The income returns on an investment, such as the interest or dividends received, usually expressed as an annual percentage. |
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