Glossary

A B C D E F G H I J K L M
N O P Q R S T U V W X Y Z


Geared Reverse Convertible This is a type of Reverse Convertible high-income product. The distinction with the “Geared” version is that if the underlying index is lower that its starting level at maturity then the investors capital is reduced on a greater than one-for-one basis
For example, a geared product with 200% gearing would result in capital being reduced on a 2:1 basis. In other words if the underlying index had fallen by 15% over the term of the product then only 70% of the investor’s capital would be returned. In this case the product could be described as having 200%downside gearing
Gearing The term gearing refers to the leverage or exposure that a product has to movements in the underlying index
A product with 100% gearing would generate a return exactly equal to any rise of the underlying index i.e. a 45% rise in the index would produce a 45% return from the product. A product with only 75%gearing would produce a return equal to only 75% of the return produced by the underlying index and similarly a product with 200% gearing would produce a return equal to twice any rise in the index.
Sometimes the term participation is used also used to refer to a products gearing
GIC A Guaranteed Investment (Interest) Certificate is a deposit investment security sold by Canadian banks and trust companies. It is guaranteed by the provider and the principal is insured (subject to certain limits) by a deposit insurance agency such as the Canada Deposit Insurance Corporation
Gilts A Gilt is the name given to a bond issued by the UK government
Global floor This is a term associated with cliquet products. Such will sometimes provide a minimum return that is more than just the full return of the capital invested. In this case it would have a global floor of something greater than 100%.
For example a cliquet that offered a minimum return of 105% of the sum invested would have a globalfloor of 105%.
Gross Margin The gross margin, before commissions and other costs, that the product generated. This can be entered either as an upfront figure i.e. 4.50% or as an annualised figure, for example as a spread to LIBOR i.e. 0.50% pa.
Growth A structured product typically providing a minimum fixed return at maturity plus a variable amount linked to one or more underlying equity market.
Growth and Income product Some types of structured product are offered with a linked fixed rate investment, usually a depositpaying a higher than market rate of interest. These products are sometimes called back-to-back products.
To differentiate these products from both standard growth products and structured income products, we term such products Growth and Income products.
Growth product A growth product is a type of structured product that produces all its return at maturity with no payments of income during the product term
A growth product is often, but not always, a product that provides a minimum return of 100% of the sum invested
Guaranteed bond A guaranteed bond, sometimes also called a Guaranteed Equity Bond, is a type of structured productthat provides a minimum return at maturity at least equal to the sum invested.