Lexicon
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Capital gains or capital losses
Variance between the Net Asset Value (NAV) at redemption and Net Asset Value at subscription.
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Capitalisation
Capitalisation consists in reinvesting, as and when it is available, income from securities held in the portfolio. Since 1 October 1989, UCITS have had the option to capitalise their income. It therefore constitutes deferred income that is taxable as capital gain as and when the units or shares in the UCITS are sold.
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Capitalisation UCITS
A UCITS for which the portfolio earnings are reinvested annually in the assets of the UCITS.
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Certificate of deposit
A certificate of deposit is a time deposit represented by a dematerialised negotiable debt security, in the form of a bearer certificate or order issued by an authorised financial institution. Its term may be from 1 day to 1 year with a fixed maturity date. Its return is very close to the money market. The benefit of a certificate of deposit is its negotiability on a secondary market. It carries interest rate risk that is dependent on its term.
