The words behind the numbers.

Fee drag

The cumulative amount a fund’s ongoing charges remove from a holding over a period, compounded.

OCFOngoing Charges Figure

The annual cost of running a fund, expressed as a percentage of the money you have invested in it.

Benchmark

An index a fund’s performance is measured against, stated with its own currency and return basis.

CPIHConsumer Prices Index including owner-occupiers’ housing costs

The ONS’s lead measure of UK consumer inflation, extending CPI to include the cost of owning a home.

Real return

A return after inflation has been removed — what the money can actually buy.

Total return

The return of an investment including income (dividends or interest), not just the change in price.

Maximum drawdown

The largest peak-to-trough fall over a period — the worst loss a holder would have sat through.

Sharpe ratio

Return earned per unit of volatility — a way of comparing results that were achieved with different amounts of risk.

Sortino ratio

Like the Sharpe ratio, but measuring only downside volatility.

Volatility

How much a fund’s returns vary around their average, usually stated as an annualised standard deviation.

ISAIndividual Savings Account

A UK tax wrapper: returns on investments held inside it are free of UK income tax and capital gains tax.

SIPPSelf-Invested Personal Pension

A UK personal pension that lets the holder choose the underlying investments themselves.

Accumulation vs income units

Accumulation units reinvest the fund’s income automatically; income units pay it out as cash.

ETFExchange-Traded Fund

A fund whose units trade on an exchange throughout the day like a share.

Holdings overlap

The share of two funds’ portfolios that consists of the same underlying holdings at the same weights.

ISINInternational Securities Identification Number

A 12-character global identifier for a specific security or fund share class.

NAVNet Asset Value

The per-unit value of a fund’s assets after its liabilities, normally struck once per day.

Share class

A variant of the same fund with its own charges, currency or income treatment — and its own ISIN.

UCITSUndertakings for Collective Investment in Transferable Securities

A European regulatory framework for retail funds, setting rules on diversification, liquidity and disclosure.

Capital Gains TaxCGT

UK tax on the gain made when disposing of an asset held outside a tax wrapper.