Call option: Option providing its holder with the right to buy an investment at a future date at a price agreed now.
Capital allowance: One of several kinds of benefit(s) available to an owner against income tax or corporation tax for capital expenditure on certain qualifying buildings.
Capital gain: Arises when an investment is sold at a higher price than originally paid.
Capital Gains Tax: Tax payable on a capital gain.
Capital growth: The focus of capital growth is to maximise the value of the capital invested rather than producing any income.
Capital value: The value of an asset (freehold or leasehold) as distinct from its annual or periodic rental value.
Capitalisation: The value of an asset assessed in relation to its projected rental income stream.
CFDs: Contracts for differences (CFDs) are an agreement between two parties to exchange the difference between the closing price of a contract and the opening price of a contract.
Chartered surveyor: A surveyor who is a qualified member of the Royal Institution of Chartered Surveyors, either a fellow (FRICS) or a member (MRICS).
Child Trust Funds (CTFs): Child Trust Fund (CTF) is a savings and investment account for children. Children born on or after 1 September 2002 will have received a £250 voucher to start their account. The account belongs to the child and can’t be touched until they turn 18, so that children have some money behind them to start their adult life. A CTF can invest in property. HM Revenue & Customs have approved providers of CTF accounts, some of which offer funds that invest in property.
Clean price: Bond price excluding accrued interest.
Closed-ended funds: Investment funds that issue a fixed number of shares, so to buy the shares there usually must also be someone wishing to sell shares.
Collective investment scheme: An investment method, such as a unit trust or OEIC, that pools the investments of many investors in a fund in order to reach defined investment objectives.
Contingent tax liability: In a property context, usually refer to the unprovided further taxation which would become payable if a company’s properties were sold at their current market value (including the valuation surplus on trading and development properties, net of any tax losses which had not been recognised in the balance sheet).
Contracts for Difference (CFDs): Contracts for differences (CFDs) are an agreement between two parties to exchange the difference between the closing price of a contract and the opening price of a contract. CFD trading is a way of trading shares or markets where you can potentially benefit from falling markets of share prices as well as rising ones.
Convertible bond: A bond distributed by a company that can be exchanged for a set number of shares, usually off the issuing corporation and at a pre-stated price.
Corporate bond: A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, M&A, or to expand business. The term is usually applied to longer-term debt instruments, with maturity of at least one year.
Coupon: The periodic interest payment made to the ‘bond holders’ during the life of the bond.
Coupon rate: The percentage rate of interest payable on a bond/note or other fixed income security. The figure shown is always the pre-tax (gross) rate.
Covenant: A subjective assessment of the character and quality of a tenant in terms of being able and willing to comply with the terms and conditions of the lease.
Creation price: A term used in the UK to refer to the cost of creating a unit, based on buying the underlying securities within a unit trust. The actual buying (offer) price is usually the creation price plus the initial charge.
CTFs: Child Trust Fund (CTF) is a savings and investment account for children. Children born on or after 1 September 2002 will have received a £250 voucher to start their account. The account belongs to the child and can’t be touched until they turn 18, so that children have some money behind them to start their adult life. A CTF can invest in property. Providers have been approved by HM Revenue & Customs to provide CTF accounts and some offer funds that invest in property.
Currency hedging: The use of currency futures and options transactions to protect the value of investments and cash against fluctuations in exchange rates, relative to the currency in which the fund is denominated.
Cycles: The pattern of investment returns were strong or positive returns are followed by weak or negative returns on a regular basis.