Accelerated benefit

An early pay out of the sum for which you are insured.

Active share

A measure of how much a manager’s investment choices differ from the index.

Actively managed

Investments managed by fund managers who use their experience to select securities and/or allocate assets in line with their views on which securities or asset classes are likely to do better than the market.

Additional medical tax credit

A credit or rebate you may enjoy in addition to that for medical scheme contributions paid. This credit is a percentage of medical expenses you have not recouped from a medical scheme and possibly disability-related expenses, plus some of your contributions above a threshold. The percentage allowed depends on whether you are above or below the age of 65 and whether you, your spouse or child have a disability.

All Share Index

The index that reflects the movement of the shares on the JSE, by reflecting all the shares in line with their market weightings (size and price).


The return an active manager earns above the return of the market.

Annualised return

The total return earned over a period averaged out over each year in the period.


A monthly pension purchased with a lump sum, typically from a retirement fund.


When you act on information you have about, for example, your health, to the disadvantage of an insurer or medical scheme. For example, taking out cover when you know you need to claim. 

Approved group life scheme

A group life scheme where the policy is owned by a registered retirement fund and premiums are paid from contributions made to the fund.

Asset allocation

The process of spreading your investment across the different asset classes such as shares, bonds, listed property and cash in order to benefit from diversification.

Asset class

An asset class is a group of investments with similar risk and return characteristics, such as shares or bonds or listed property.

Average tax rate

The average rate of tax you pay on your taxable income, calculated by dividing the tax you pay by your taxable income and expressing as a percentage.

Banker’s acceptances

These are bills of exchange or written orders that bind one party to pay a fixed sum of money to another party on demand or at a predetermined date. Banks offer this short-term finance at better rates than overdrafts and the borrower can sell the banker’s acceptance to another party. They are no longer used in South Africa but are still in use in other countries.

Base cost

The starting cost that can be subtracted from the proceeds of selling or disposing an asset in order to determine the capital gain (or loss). 

The base cost of an asset for capital gains tax is the value of the asset on October 1, 2001, or the cost of acquiring the asset after that date and in both cases the cost of any improvements can be added.


A benchmark is used to measure the performance of a fund or portfolio and particularly the manager’s performance relative to that of the market in which the manager invests, measured by an index. For example, the FTSE/JSE All Share Index is a common benchmark for a South African equity fund.

Benchmark agnostic

A fund or portfolio is benchmark agnostic if the manager does not invest in the same or similar securities, sectors, regions or countries as are reflected in a benchmark index.

Benchmark cognisant

Investing largely in line with the benchmark.


A person who gets a benefit from a life policy, a retirement fund, a trust or a will.

Beneficiary fund

A beneficiary fund is an umbrella retirement fund into which your retirement fund death benefits can be paid and administered for the benefit of your dependants, especially minor children.


This term is often used to refer to the return of you would earn if you invested in an entire market. The term actually means a measure of a volatility of stock or other  security relative to the rest of the market.

Bottom-up investing

Choosing each share based on its merits and not based on the economic trends and the sector, industry or region that will benefit.


Bonds are created when governments, state owned entities, municipalities or companies raise money from investors by issuing loans. Each bond issued represents an equal portion of the debt. The issuer pays interest and repays the capital after certain term. Investors can trade bonds, giving them a price that differs from the price at which they were issued.

Bond originator

A bond originator helps you determine what home loan you can afford and obtains quotes from a number of home loan providers to help you find the best deal.

Bond yield

The income you can earn as a percentage of the price of a bond.

Boutique manager

A small, often owner-managed, investment firm that offers specialised investment management.

Bracket creep

The phenomenon that occurs when tax brackets are not adjusted fully for salary inflation and results in your income increasing only by inflation but your tax rate increasing because your income falls into a higher tax bracket.

Call deposits

These are amounts investors deposit in an account which can be called back if the investor wants to withdraw the money.

Capital gains tax

The tax you pay when you dispose of certain assets, such as investments, and realise a gain. 


The share price multiplied by the number of shares currently in issue.

Capped Shareholder Weighted All Share Index

An index of shares on the JSE, weighted to reflect amounts invested on the local exchange and excluding amounts shareholders hold on foreign exchanges. In this index share weightings are capped at 10% to reduce concentration risk.


Money in a bank account or money market fund that can be accessed immediately.


When you give or cede your right to an asset or benefit to someone else. You can, for example, cede your right to an insurance policy benefit to a credit provider as security for your debt. 

CGT inclusion rate

The percentage of the capital gain that is regarded as taxable.

Chronic condition

A condition that requires ongoing long-term or continuous medical treatment – typically regular medication and check-ups. For example, high blood pressure or diabetes.

Chronic medicine

Medicine taken to treat a chronic condition, such as high blood pressure or diabetes, that is ongoing or long-term.


An amendment to a will that must be signed in the same way your will is signed.

Collective investment scheme

An investment in which your money is pooled with that of other investors so that the assets can be professionally managed by experienced fund managers. Unit trusts, some exchange traded funds and hedge funds are all collective investment schemes.


Raw materials, minerals or agricultural product, such as oil, gold, copper, platinum, or wheat, maize or coffee. Also known as resources.

Community rating

A principle for setting contributions in medical scheme options. It is the opposite of risk rating, which means your individual circumstances, such as your age and health status, is not taken into account and the contributions are the same for all who belong to that option.

Compensation Fund

The fund that provides compensation to employees who are injured or contract diseases through the course of their employment. The Compensation for Occupation Injuries and Diseases Act (COIDA) established the fund and determines who is eligible for compensation.


When interest added to your investment earns more interest, the growth on your investment is said to be compounding and it grows faster than an investment from which you draw the interest. 

Compulsory purchase annuities

A monthly pension that you are obliged to buy with a certain portion of your savings in a retirement fund  typically two-thirds of your savings.

Conflict of interest

A conflict of interest arises when an individual or entity has competing interests that could potentially result in him, her or it not acting in your best interest.

Continuation cover

Group life insurance that you can convert into an individual policy when you leave your employer.

Contract for difference

An over-the-counter or unlisted contract that gives you access to the same returns as a security without owning it


The amount you pay to belong to a medical scheme or agree to pay to a retirement fund.

Conversion benefit

The ability to convert group life cover into an individual policy when you leave your employer. Also known as continuation cover. 

Credit bureau

A credit bureau collects and stores data about loans and store accounts you have from numerous credit providers and lenders. It compiles your credit report which includes data on how you manage your repayments. This information can be accessed by credit providers who want to assess how worthy you are of being given more credit.

Credit life cover

Life and disability insurance that pays your debt if you die or are disabled. Read more in Credit life cover.

Credit report

A report compiled by a credit bureau based on information from numerous credit providers about the debts you hold and how well you have been repaying them. Your report can be accessed by credit providers who want to assess whether to lend to you and at what interest rate.

Critical illness cover

Insurance that pays out if you are diagnosed with a defined dread disease. Also known as critical illness or severe illness cover. Read more in Severe illness cover.


The company that holds the assets of collective investment scheme in safe custody.

Day-to-day healthcare

The out-of-hospital health services you get more often from your general practitioner, dentist, optometrist and includes medication, blood tests, x-rays and other scans.

Default annuities

An annuity or pension offered to you by your retirement fund. It is approved by the trustees as broadly suitable for the members of the fund.

Defined benefit retirement fund

A retirement fund that guarantees a benefit at retirement. The benefit is defined by a formula based on your final salary and years of service.

Defined contribution fund

A retirement fund in which the benefits you receive are based on how much you (and your employer) contributed and the returns from the investment of those contributions after fees.


These are securities that derive their value from another security. For example, an option to buy a share on the JSE.

Designated service provider

A healthcare provider (doctor, hospital, pharmacy, etc) you must use in order to enjoy cover for a prescribed minimum benefit from your medical scheme.

Developed markets

The share, bond and other financial markets of countries whose economies and financial markets are advanced. Typically, this includes the US, UK and other European countries.

Disability cover

Insurance that pays out if you are disabled as defined in the policy. Read more in Disability cover. 

Discretionary investment fund managers

Investment professionals who manage investment portfolios for the clients of financial advisors. This allows advisers to focus on determining their client’s investment needs and giving advice, while a professional team selects and combines funds and/or asset managers to manage parts of the portfolio to deliver the required returns. Also known as a discretionary fund manager.

Disease management programme

A structured treatment programme intended to help you better manage a chronic illness or serious disease.


The practice of spreading investments across different securities, sectors, markets, asset classes and managers to reduce risk and enhance returns.


A regular payment to shareholders made out of the company’s profits.

Dividend yield

The dividends you earn as a percentage of the price of a share. 

Dread disease cover

Insurance that pays out if you are diagnosed with a defined dread disease. Also known as critical illness or severe illness cover. 

Downside risk

Managers who focus on avoiding losing money on the investments they have made are said to manage downside risk.

Dual listed

A company is dual listed when its shares are listed on more than one stock exchange.

Effective annual charge

A standardised method of disclosing the costs you are likely to pay over the term of an investment product. It includes the total expense ratio and transaction costs, as well as advice fees and potential penalties.

Effective tax rate

The average rate of tax you pay on your income when the tax brackets and rebates are applied.

Emergency fund

Savings you can easily access if an emergency arises and you need cash. These savings are a financial safety net that prevent you from borrowing in a crisis. 

Emerging markets

The share, bond and other financial markets of countries whose economies and financial markets are not yet advanced. Typically, this includes China, India, Brazil, Russia and South Africa among many others.

Employer-sponsored fund

A retirement fund set up by your employer for the benefit of employees and into which your employer pays contributions on your behalf.


An endowment is an investment policy that commits you to invest for at least five years. Endowments have tax, estate planning, offshore investment and security from creditor benefits that are useful to certain investors.


Shares in a company that are traded on a stock exchange, such as the JSE. Equities pay dividends and you can also make a capital gain if you sell equities at a higher price than what you bought them for.


Everything you own and owe at the time of your death. 

Estate duty

Tax that is levied on your estate after your death in terms of the Estate Duty Act. 

Estate duty exemption

The exemption or abatement that is allowed against the value of an estate before estate duty is applied.

Exchange traded fund

A fund listed on a stock exchange that allows you to invest in a basket of shares, bonds or other securities that make up an index.

Exchange traded note

An investment that promises to track an index or commodity, but may not necessarily be invested in that index or commodity. 

Exchange traded product

The collective name for exchange traded funds (ETFs) and exchange traded notes (ETNs).


Circumstances under which you are denied cover on your life or health or on your possessions


The person or company appointed by the Master of the High Court to wind up your estate after your death.

Executor’s fees

Fees deducted from your estate to pay the executor. These fees are limited to 3.5% of your estate (4,025% including VAT).

Fee hurdle

The level of performance the fund must achieve before the manager can charge a performance fee.

Feeder fund

A fund that invests or feeds into a single fund. A fund based in rands, for example, may feed into an offshore fund that is based in another currency.

Fixed interest investment

Investments that earn you interest on, such as fixed deposits at a bank or bonds. These investments offer reliable income and are generally regarded as having a lower risk than ones invested in equities.

Foreign investment allowance

The amount of money you are allowed to take out of South Africa under the country’s exchange control regulations.

Free cash flow

The cash remaining after a company pays its operating expenses and capital expenditures.

Full underwriting

Underwriting that includes questions about your and your family’s medical history, and also potentially medical tests such as blood tests or an ECG. 

Fund fee class

Unit trust funds with different fees for different investors, such as individual investors, investors using an investment platform or institutional investors, have more than one fee class. 

Fund manager

A person or company that chooses when to buy and sell shares or bonds, other securities or underlying funds for a unit trust fund, fund of funds or for a retirement fund. Also known as an asset manager or investment manager.

Fund of funds

A fund that invests in other funds instead of directly into shares, bonds or other securities.

Gap cover

A short-term insurance policy that covers the shortfall between what your medical scheme pays and what a doctor charges to treat you in hospital. Some policies also have cover for shortfalls in oncology benefits and treatment in casualty.

Generic medicine

A generic medicine contains the same ingredients as the original brand name medicine that was developed. Generic medicines can be produced at cheaper prices after the patent on the brand name medicine has expired. Patents allow the company that developed a medicine to recover their research and development costs.


Another name for a bond. The name has its origins in the gold edging that was originally used on bond certificates issued by governments.

Grace period

The period a provider gives you to pay your premiums or contributions before your contract ceases or lapses.

Group life cover

Life, disability and possibly severe illness and funeral cover that is covered through a policy for a group, such as all employees of an employer or all members of a union. 

Growth investing

An investment strategy that focuses on the shares of companies whose earnings are growing rapidly and are likely to continue to grow.

Growth stock

The share of a company that is experiencing rapid growth in earnings and revenue, and typically pays little or no dividends.

Guaranteed annuity

A guaranteed pension you buy with your retirement savings when you get to retirement. Your pension is guaranteed for the rest of your life. Also known as a life annuity.


The person who is legally responsible for looking after a minor child or an adult who is incapable.

Guardian’s Fund

A government fund that manages money on behalf of people who are legally incapable or who do not have the capacity to manage their own affairs. This includes minors, unborn heirs and missing people. 


You can protect yourself against losses when you invest in a market with a hedge or a position that will offset the losses. Typically, derivatives that can be exercised only if a loss occurs are used to hedge investment and/or currency positions.

Hedge Funds

A collective investment scheme that pools investor’s funds to invest and make money regardless of whether markets are going up or down. Hedge funds can borrow to invest, engage in short selling and use other less-restricted and riskier investment strategies than unit trust funds.

High conviction managers

Managers who invest heavily in a small selection of securities and will deviate from the benchmark.

Homeowner`s insurance

Also known as building insurance, this insurance protects you against damage to the building that you live in and its fixtures. It protects you against fire, floods, storm damage, landslides, accidental damage and burst geysers or water pipes.

Hospital cash plan

An insurance policy that pays out a pre-defined benefit if you, or anyone else named in the policy, are hospitalised.

Hybrid annuity

An annuity that combines a retirement income or pension based on investments with a guaranteed or secure income. 


A condition that impairs your ability to move physically, or impairs the functioning of your body. Examples, include the loss of a limb, speech, hearing, vision, confinement to a wheelchair or severe burns.

In community of property

The default way of getting married that involves spouses sharing all their assets and liabilities equally.

Income funds

These funds aim to deliver a high level of income by investing in interest-bearing investments with an average term to maturity of no more than two years. They are short-term interest-bearing funds.

Income protection cover

A policy that pays out a monthly income benefit if you are disabled as defined in the policy. 

Income tax brackets

The taxable income bands to which different tax rates apply.


An index is a simulated portfolio of the shares, bonds or other securities in a market or a sector of the market. It allows you to track the performance of that market.


An index-tracking fund or portfolio invests in the same weightings of shares, bonds or other securities that make up an index.


If you die without writing a will, you are said to die intestate and your estate is dealt with in terms of the Intestate Succession Act.

Investment charges

The costs of investing in securities, such as brokerage and the securities transfer tax, that are incurred in an investment, such as a unit trust fund.

Investment-linked living annuity

An investment you buy with your retirement savings and from which you draw a pension during retirement.

Investment platform

A one-stop online shop where you can buy and sell a range of unit trust funds, and possibly exchange traded funds, typically from different financial institutions.

Infrastructure investment

Investment in physical structures or systems that provide utilities such as electricity, roads, sewage and water to the public with a view to stimulating economic growth. The investments are typically unlisted and available to institutional investors such as retirement funds. The investments may be offered as shares, debt instruments such as bonds or the physical property.

Investment risk

The risk of losing money – typically as a result of volatility, failing to meet your investment goals or underperforming inflation.

Investment style

An investment style or philosophy that is recognised such as value or growth.

Investment universe

The range of investments from which a fund manager can choose – often defined by the fund's investment aims or mandate.


This is a tax certificate you should get from your employer at the end of the tax year. It details your income, deductions and the tax you have paid. The information on it should be submitted to the South African Revenue Service and should prepopulate your tax return.

Junk status

A rating from a global credit rating agency that indicates that a government’s ability to honour its debts is poor and that investing in its debt instruments is risky. Junk status leads to certain indices excluding that government’s bonds and this in turn results in investors selling the bonds. This ultimately increases the interest the government must pay on its bonds to attract investors. This raises the cost of borrowing.


When you owe a creditor money and fail to pay on time, a creditor can issue a summons and ask the court for judgment against you. The creditor can then instruct a sheriff to collect what the judgment says you owe and the judgment will be recorded on your credit record.


A typically undisclosed payment that compensates a person or institution for preferential treatment.

Large cap shares

The largest shares on a market ranked by their total market value or market capitalisation. On the JSE this is the top 40 shares.

Large cap stocks

These are the largest shares by market capitalisation on a stock market. In South Africa, the top 40 shares are the large cap stocks.

Late-joiner penalty

An ongoing penalty applied to medical scheme contributions when a member joins a medical scheme after the age of 35, either for the first time or after a break in membership. The penalty applied depends on how long the member has been a member of scheme previously.

Law of intestate succession

The law that states how your estate must be distributed if you die without a will.


Money or property you leave to someone after you die. 

Life annuity

A guaranteed annuity or pension you buy with your retirement savings when you get to retirement. Your pension is guaranteed for the rest of your life.

Life cover

Insurance that pays out if you die.

Limited underwriting

A life insurance policy has limited underwriting if you only have to answer a few questions about your health and lifestyle and are not expected to have any medical tests. 


Listed companies are those that are included and traded on a stock exchange. Most exchanges have requirements that companies must meet in order to be listed and remain listed. This potentially offers you more protection than you would enjoy investing in an unlisted company’s shares.

Listed property

The shares of property companies involved in developing and managing properties (or real estate) that are listed on a stock market.

Living annuity

An investment you buy with your retirement savings and from which you draw a pension during retirement. Also known as an investment-linked living annuity.


An additional premium you are charged to cover the additional risk of you dying or becoming ill or disabled as a result of your health, occupation or sports and hobbies.

Marginal tax rate

Marginal tax rates are rates that apply to different levels of income. In South Africa, the lowest income earners pay no tax, but above the tax threshold different rates apply to different income bands starting at 18% and extending to 45% for the highest earners.

Market capitalisation

The market capitalisation of a company is the total value on a stock market of the shares issued at any point in time. It is calculated by multiplying the number of shares issued by the share price.

Master of the High Court

The office within the High Court that oversees the administration of deceased estates, trusts, insolvent estates and the care of minors.

Material non-disclosure

A failure to share relevant information that would enable an insurer to properly assess the risk when you apply for or renew an insurance contract. 

Medical savings account

A savings account funded with up to 25% of your medical scheme contributions which you can use to pay for day-to-day healthcare expenses.

Medical scheme fees tax credit

A credit or rebate you enjoy for paying medical scheme contributions. The credit reduces your tax and the rand amount for the member and dependants are set each year in the Budget.

Medical scheme risk benefits

Benefits paid by the scheme from all members’ pooled contributions and not from your medical savings account.

Medicine formulary

A list of prescription medicines your medical scheme option or health plan covers. The list covers the most cost-effective medicines for your condition.


A person under the age of 18.

Model portfolio

A portfolio that blends asset classes, investment managers and investment styles to achieve an expected return with a corresponding level of risk.

Momentum investing

Investing in shares that have been performing well and are likely to continue to do so.

Money market

The buying and selling of short-term liquid debt instruments such as treasury bills, negotiable certificates of deposit, bills of exchange and short-term bonds is referred to collectively as the money market.

Money market funds

These funds invest in the money market in a variety instruments that have on average terms of no more than 90 days. They aim to earn better interest than a bank savings account while remaining liquid and easy to access.

Multi-asset funds

These unit trust funds invest across shares, bonds, listed property and cash. 

Multi-asset income funds

These funds focus on earning income investing mostly in the money market and bonds, but can hold up to 10% in shares and 25% in listed property.

Mutual fund

The term used in the US, Canada and India to describe a fund in which investors pool money to be managed by experienced fund managers. The manager selects a range of assets such as shares, bonds, property shares, cash instruments or even physical property.

Negotiable certificates of deposit

These are issued by institutions that offer to pay the bearer an amount plus interest on maturity. They are normally issued for less than a year

Net asset value

The net asset value of a unit trust fund is the value of all the shares, bonds or other securities in the fund, less the allowed expenses (for example, management fees or trading costs), divided by the number of units in issue.

Notice deposits

These are amounts investors deposit in an account and if they want to withdraw, they have to give notice. The interest rates are higher than that on deposits which can be called at any time.

Online share trading platform

A stockbroker that allows you to open a stockbroking account and buy and sell shares or other securities online, typically at a lower cost than you would pay for using human stockbroker whom you can call or visit.

Open enrolment

A principle that applies to South African medical schemes and obliges them to admit either any member or any eligible member.

Open medical scheme

A scheme that must admit anyone.


In investing an option gives you the right to buy or sell a security, such as a share, at a particular price at a future date. At the future date, you are not obliged to buy or sell if the price set in the contract price is not favourable – for example, if it is higher than what you can buy the share for in the market.

Out of community of property with accrual

How your marriage is described if you and your spouse draw up an antenuptial agreement excluding the assets you own when you marry from the marriage. Assets built up during the marriage, are, however, shared equally.

Out of community of property without accrual

How your marriage is described if you and your spouse agree not to share the assets you owned before you married as well as the assets you acquire during the marriage.

Own occupation

The work or job you can do. Some disability cover will cover you for an inability to do the work or job you currently do.

Own or similar occupation

The work or job you can do, or any similar job that you could do. Some disability cover will cover you for an inability to do the work or job you currently do or any similar job or work.

Paper loss

An investment loss that you have not realised as you have not sold an investment and it may still recover. It is only reflected on your investment statement.

Partial disability

A disability that leaves you able to work, but reduces your ability to function so you cannot perform as well as you did before.

Partial underwriting

Underwriting that involves only a few questions about your health and no medical tests.

Passively managed

Passively managed investments track an index. The fund manager makes no active selection of the securities or asset classes for the investment.

Pay as you earn (PAYE)

This is the income tax that is deducted by your employer from your salary, wages or bonus and paid over to the South African Revenue Service monthly.

Pension fund

A retirement fund that requires you to buy a pension with at least two-thirds of your savings at retirement.

Performance fee

An ongoing asset management fee that is not fixed but based on performance above a certain performance hurdle.

Permanent disability

A disability from which you are unlikely to recover. 

Pre-existing conditions

A condition you had before you took out insurance or medical scheme membership.

Premium guarantee periods

Periods for which you are guaranteed a predetermined increase in your premiums. When the period expires, your premiums can be adjusted. 

Premium holidays

A benefit on a policy that allows you to skip one or more premiums without losing your cover.

Prescribed minimum benefit

A benefit that a scheme must by law provide, including cover for all emergencies, 271 life-altering conditions and 26 common chronic conditions.

Preservation fund

A retirement fund into which you can transfer your savings from an employer-sponsored fund when you leave that employer, in order to preserve those savings until retirement. No new contributions are allowed but one withdrawal before retirement is allowed.

Price-to-book ratio

This ratio compares the share price to the value of a company reflected in its financial statements. The ratio is calculated by dividing a company’s market capitalisation by its book value. The book value is the company's assets less its liabilities as reflected on its balance sheet. The higher the ratio, the higher the premium above a company’s assets investors are willing to pay.

Price-to-earnings (p:e) ratio

This ratio shows you how long it will take you to recover your investment in a share. It is calculated by dividing the price of a share by its annual dividend earnings per share.

Private equity

Shares in companies that are not listed on a stock exchange.

Promissory notes

These are promises made by one person to another to pay a particular amount on demand or on a fixed date. They are accepted by banks in lieu of overdrafts and banks then sell them at a discount to investors who are paid the full amount on the maturity date.

Provident fund

A retirement fund that until March 2021 allowed you to take all your savings in cash at retirement. Contributions to the fund were previously not tax deductible, but became deductible from March 2016. Two-thirds of contributions made and growth on it since March 2021 must be used to buy an annuity or pension at retirement, subject to some exceptions.

Provisional taxpayer

A provisional taxpayer is any one who receives income, other than a salary that is taxed. Provisional taxpayers earning rental or business income of more than R30 000 must declare their income and pay tax during the tax year instead of only doing so on assessment.

Purchasing power

The power of your money to buy goods and services. As inflation rises, the power of the rand or the dollar to buy goods an services is eroded. 

Primary healthcare plans

Low-cost plans that in return for a monthly premium offer cover for day-to-day healthcare, such as a visits to a general practitioner, dentist, optometrist, basic x-rays and blood tests as well as prescribed medicines. These plans may exclude cover for ongoing chronic conditions.

Quality share

The shares of company that is well-managed, has a good cash flows, a strong balance sheet and a competitive edge.


You may need to rebalance to ensure you maintain diversification in your investments after market movements upset your allocations to asset classes or market sectors.


A medical scheme must, in terms of the law, hold a certain amount of money in reserve in order to have enough to provide benefits when claims are high. South African medical schemes must hold 25% of members’ contribution income in reserve at all times.


What is left in an estate after all debts, taxes, legacies and bequests have been paid.

Restricted medical scheme

A scheme with membership that is restricted to the employees of an employer, an industry or to members of a profession.

Retirement annuity

A retirement fund whose membership is open to individuals who can contribute any amount above the minimum. Contributions are tax deductible but you cannot withdraw your savings before age 55 except under certain limited circumstances.

Retirement benefits counselling

Factual information about the risks, costs and charges, of an investment portfolio, your options to preserve your savings or your annuity options at retirement. Counselling is not advice.

Retirement fund

A fund in which you invest for your retirement that is registered as a retirement fund with the Financial Sector Conduct Authority. Contributions are tax deductible and savings grow tax free.


What you get back when you invest – the money you make through interest, dividends and capital gains. A return is usually expressed as a percentage of the money you invested.

Risk capacity

Your ability to take investment risk.

Risk required

The level of investment risk you need to reach your investment goal.

Risk tolerance

Your preference for or emotional ability to take investment risk without being overly worried.


A robo-adviser provides automated financial advice based on a computer-based algorithm. Typically, robo-advisers recommend investments – often low-cost passively managed ones - based on how you answer questions about your investment needs and the investment risks you can tolerate and afford to take.

Rolling returns

Rolling returns show you an average return for a particular period that begins anew each month or year between two points in time. You can see, for example, how an investment has performed over each five-period within a 20-year period.


The practice of lending shares, bonds and other securities - likely to be held by an investment fund or portfolio for long periods - to other investors for a fee.

Sectional title

Owning the title to a section of a property scheme, such as a block of flats or a townhouse development or retirement village.


Securities are financial instruments like shares or bonds that can be traded on public exchanges or privately.

Severe illness cover

Insurance that pays out on the diagnosis of defined severe illnesses.  


An investment in a company that gives you part ownership, can earn you a share of the profits distributed as dividends and can give you a capital gain if you sell the share at a higher price than the price you paid for it. Shares are also known as equities or stock.

Shareholder Weighted All Share Index (SWIX)

This index includes 99% of the shares on the JSE, but shares are weighted in line with amounts invested in listed companies through the JSE. Amounts held by shareholders in these companies on foreign exchanges are excluded.

Smart beta

A low-cost investment that follows rules that ensure exposure to certain market factors that can deliver returns above those of the market.

Standard deviation

A measure of the variation of returns from the average return and a measure of volatility in returns.


An investment professional or entity registered to trade on a share market and who can buy and sell shares on your behalf as well as offer advice on what shares to buy and when. A stockbroker earns a commission on your trade or transaction. 

Survival periods

A period that you must survive after you claim – typically for a severe illness or disability benefit – before the insurer will pay. The aim is to ensure the benefit is for someone who survives and is not a death benefit. 

Stock market

A forum that allows organized trading of shares or over-the-counter securities.

Stock pickers

A manager who specialises in researching and selecting individual shares.

Tax rebate

A reduction of tax calculated when the tax tables are applied in order to ensure you do not pay tax on income that is below the tax threshold – the income limit below which you do not pay tax.

Tax threshold

The level of income you can earn before you become liable for income tax.

Tax-free savings account

A tax-free savings account is a bank or investment account that allows you to grow your money without paying tax on the interest, dividends or capital gains.

Taxable capital gains

The percentage of any capital gains you made in any tax year that must be included for tax, less the annual capital gains tax exclusion.

Taxable fringe benefit

A benefit, such as free accommodation or medical scheme contributions, that are provided by an employer to an employee or contractor, that is taxable under the Income Tax Act. The value of this benefit must be added to your income and taxed.  

Taxable income

Your total or gross income less any income that is exempt from tax (for example, interest earned that is below the interest exemption) and less any amounts you can claim as deductions (for example, contributions to retirement funds). Your taxable income includes any taxable capital gains.

Temporary disability

A disability from which you will recover.

Testamentary trust

A trust set up in your will, typically to hold assets you leave to your heirs and to administer these for their benefit.


A man who draws up a will. 


A woman who draws up a will. 

Tied agent

A tied agent is an advisor who is employed by a company that provides investment and/or insurance products and can typically only recommend those products to you, or products approved by the company that complement its range.  

Tiered benefits

Benefits paid on a severe illness policy at can be paid at less than 100% of the insured benefit, depending on the severity of your illness.

Top-down investing

Allocating to different sectors, parts of the economy or regions likely to do well and then choosing individual shares or other securities within those.

Total expense ratio

This is a measure of costs in an investment fund or portfolio that shows the percentage of the fund or portfolio value that is paid in costs on an annual basis.  

Total investment cost

This is a total of all expenses in a portfolio expressed as a percentage. It includes the costs of trading (the transaction costs) and the total expense ratio – the asset management fees as well as costs such as custody, audit and bank fees.

Tracking error

The tracking error measures the accuracy with which an investment or fund tracks or replicates an index. Most funds have a tracking error as a result of costs and cash held to pay investors who wish to withdraw. 

Transaction costs

These are the costs incurred to buy and sell the underlying assets in an investment fund or portfolio

Treasury bills

These are short-term loans to the government. They are issued for different periods usually between 91 days and 182 days. They are sold at a discount to the value paid out at maturity.


The company that holds the assets of a unit trust fund in safe custody.

Umbrella retirement fund

An umbrella retirement fund is a retirement fund for the employees of more than one employer. It may be a commercial fund set up by an insurer or retirement fund administrator or a fund catering for the employees of employers participating in a bargaining council, in a union or in an industry.

Unapproved scheme

A group life scheme that is not part of an approved retirement fund but where the company owns the policy and pays the premiums.


The process an insurer uses to assess the risk of insuring you or your goods.

Unit trusts

An investment in which you pool your money with that of other investors and which is managed by experienced fund managers who select a range of a range of assets such as shares, bonds, property shares, cash instruments or even physical property.

Unsecured loan

A loan that is not secured against any of your assets. As these loans are more risky than secured loans against your home or car, you are likely to pay a higher interest rate.


The price of a security, such as a share, relative to its expected or historical earnings. If the price of the share rises without its earnings rising, it will have a high valuation.

Valuation-based investing

Investing in shares with a focus on the price relative to expected future earnings.

Value investing

Investing in shares that are valued on a stock market at a price lower than the break up value of the company – the value of its assets or parts.

Value share

A share of companies that is trading at a price on the market that is lower than the value of the company.


A measure of how volatile the price of a financial instrument or market is – how much it moves up and down over time.

Voluntary purchase annuity

An annuity or monthly pension you buy for a set period with the cash lump sum from your retirement that you are not obliged to use to buy an annuity, or with any other cash sum you have. The capital that is repaid to you is exempt from tax and you only pay tax on the portion of the annuity which is paid from the growth on your capital. 

Waiting period

A period during which you cannot claim on a policy or from a medical scheme for all or certain benefits. 

With-profit annuity

This is a guaranteed annuity or pension with annual increases based on the performance of an investment portfolio. The income will never decrease, but the increases in it will change each year.  


A will is a legal document that directs what should happen to your money, investments, property and other valuables when you die.


The income you can earn as a percentage of the price of a financial instrument such as a bond.

Yield curve

The yield curve is a graph that shows the interest rates for short-term debt instruments, like negotiable certificates of deposit, relative to those for long-term instruments such as 30-year bonds.

If long-term rates are higher than short-term ones, the yield curve is described as positive (it slopes upwards), but if long-term rates are lower than short-term rates the yield curve is said to be negative (it slopes down).