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Accumulation fund : a fund where the benefit received by the investor is determined by the contributions that have been invested plus the investment earnings, less any fees, taxes and insurance premiums.
Allocated pension or annuity : a retirement income investment where an individual invests their superannuation money and receives an income payment periodically. The value of the account depends on the investment earnings and the amount of income taken less any fees or taxes. The capital is accessible and the income is set between Government minimums and maximums. Income will continue to be paid for as long as the account balance is greater than zero.
All Ordinaries Accumulation Index: a measurement of the average movements in share price of a selection of major Australian companies listed on the Australian Stock Exchange. It is an accumulation index, which means that it assumes that dividends have been reinvested.
Annuity: a regular income stream paid to an individual from a lump sum investment, usually for the purposes of generating a retirement income stream.
Approved Deposit Fund (ADF): a concessionally taxed investment fund for superannuation monies. Similar to a superannuation fund, however an ADF can only accept ETP's (eligible termination payments) and cannot allow contributions. For this reason superannuation funds have become more popular.
Application: to apply for an investment in a unit trust or managed funds.
Application Price: the price per unit or share of an investment in which applications are made.
Appreciation: the increase in the value of an asset.
Asset allocation: a representation of how a portfolio is invested among the various available asset classes eg a balanced fund may have an asset allocation of 30% Australian shares, 25% international shares, 10% property, 20% fixed interest, 10% international fixed interest and 5% cash.
Asset classes: the range of financial securities, such as shares, bonds, property and cash.
Asset value: the value of assets underpinning a security. These may not be fully reflected in the price of a security.
Asset purchase (Leasing): Assets are technically hired to the user until the last payment of the agreement, at which point the user, referred to as the hirer, becomes the outright owner. Depending on business usage, the interest portion of the regular repayments and depreciation can be claimed as tax deductions. Flexibility of the structure is an attractive feature. No minimum lump sum payment (balloon) at the end of an asset purchase agreement. Maximums are the same as for lease residual amounts and are set down by the ATO.