Above threshold benefits

Benefits paid for by the scheme that you enjoy when your day-to-day healthcare claims exceed a threshold. The threshold is typically set above the balance in your medical savings account so that when this account is exhausted you pay some claims out of your own pocket in a self-payment gap until you reach the threshold.

Accelerated benefit

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

Accounts receivable turnover ratio

This ratio gives an indication of how well the business manages to get those who owe it money to pay their accounts. It is calculated by dividing the amount of sales on credit over a period by the average value of the accounts outstanding for the same period.

Active ownership

Being an active shareholder by engaging with investor companies and voting on shareholder resolutions.

Active share

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

Active stewardship

Being an active steward or manager on behalf of a shareholder by engaging with investor companies and voting on shareholder resolutions.

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.

Acute medication

Acute medication is prescribed by a doctor for a short period to combat a temporary illness or condition.

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.

Affordability assessment

When you apply for credit, a credit provider must assess whether you can afford the repayments by considering your income and expenses.

Advance-fee fraud

Investors are tricked into paying a small upfront fee in exchange for a share of a big amount later that the fee will supposedly unlock. The fraudster vanishes after taking the fee.

Aggregate capital gain

The sum of all your capital gains and losses for the tax year, after applying the exclusions, limitations, rollovers and any applicable annual exclusion, when the result is positive.

Aggregate capital loss

The sum of all your capital gains and losses for the tax year, after applying the exclusions, limitations, rollovers and any applicable annual exclusion, when the result is negative.

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).


Benefits provided by an employer such as those for housing, work-related travel expenses or an entertainment allowance.  These may be taxable.


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

Alternative asset classes

Investments beyond listed equity, bond, property and cash markets such as private (unlisted) equity, private (unlisted) debt, infrastructure projects, foreign currencies and hedge funds.

Angel investor

These investors are typically successful businesspeople who want to help young entrepreneurs who are starting out. They may also act as mentors.

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.

Assessed capital loss

An aggregate capital loss to be carried forward, or the aggregate capital loss for the current tax year, together with an assessed capital loss brought forward from the previous year. Alternatively, the previous year’s assessed capital loss brought forward where there is no aggregate capital gain or loss for the current tax year or the portion of an assessed capital loss brought forward that exceeds the current tax year’s aggregate capital gain.

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.


An assessment of income tax issued by the South African Revenue Service without your input. The assessment is based on information about your income, deductions and tax paid that is submitted by your employer, bank, financial institutions, medical schemes, retirement annuity fund administrators and other third-party data providers.

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 it as a percentage.

Balloon payment

A portion of the total cost of a vehicle that is deferred to the end of the finance term, thereby reducing the monthly instalments. The outstanding amount must be either be paid at the end of the term, or the vehicle must be refinanced or traded in.

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.

Basic salary

The cash component of your salary package, before any deductions or additional benefits and excluding overtime pay and bonuses.


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

Blue chip

The shares of high-quality companies – often multinationals – that have a dominant position in their industries and have produced reliable returns over many years.

Boiler room scam

Agents cold-call potential clients or send unsolicited mails and then use high-pressure tactics and promises of high returns or exclusivity to bully them into buying.


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 a 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.

Bottom-up allocation

Asset allocation decisions that are based on the relative valuations of shares bonds or other securities. The exposure to an asset class depends on the price relative to earnings of each security.

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.

Double Taxation Agreement

An agreement made between two countries to prevent a taxpayer being taxed on the same income or gains in both countries.

Boutique manager

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

Bracket creep

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

Business plan

A document that outlines the goals and objectives of the business and a roadmap for achieving them. It keeps business owners focussed and is required if you apply for financing.

Buy-and-sell agreement

A contract that outlines how a co-owner’s share of a business will be purchased by the remaining co-owners upon his or her death.

Call deposits

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


The money you have invested, at its current value.

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.

Carbon credit

A form of investment in projects, such as forestry or agricultural ones, that removes or reduces greenhouse gas emissions that are used by companies and individuals to offset their own emissions or carbon footprint.

Carbon emissions

The carbon dioxide emitted by a business, individual or practice. Carbon emissions make up the bulk of the green- house gas emissions that contribute to global warming.

Carbon footprint

A measure of the greenhouse gas emissions of a person, group, company or country, determined from green-house gas emissions or carbon intensity.

Carbon neutral

When carbon emissions or carbon footprints are minimised and offset through environmentally friendly initiatives or by buying carbon credits.

Carry on a trade

Practising any profession, trade or occupation, running a business or venture, being employed or renting out property.


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

Cash equivalents

Short-term investments that can be quickly converted into cash.

Cash flow

The flow of cash in and out of your personal finances or business. Many expenses need to be paid quickly, so you need to be sure you receive enough cash in to cover these. Money you are owed may take time to collect and does not help meet immediate expenses.


To give or transfer your right to something.


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 or long-term care such as asthma, high blood pressure, diabetes or HIV.

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.

Civil union

A legalised marriage between two people, of the same or opposite sex, and over the age of 18. A civil union enjoys all the same rights, protections and consequences as a civil marriage between a man and a woman.

Climate change

The change in the climate globally brought about by changing weather and human activity.

Climate investing

Supporting companies and technologies that are aiding the transition away from fossil fuels and carbon-intensive industries.

Close Corporation (CC)

A separate legal entity which has rights and duties of its own. It must be registered through the Companies and Intellectual Property Commission (CIPC) and be a registered taxpayer in its own right. It is administered by the owners who are called members, who run the business. No new CC’s have been allowed to register since  May 2011, but it’s possible to buy a shelf company (a Pty (Ltd) or CC) that is registered with CIPC but inactive.

Code for Responsible Investing South Africa (CRISA)

A code for institutional investors, such as retirement funds, that encourages the inclusions of ESG principles in investment decisions.


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


An asset that is used as security for a loan. It’s agreed upfront that if the loan is not paid back, the asset becomes the property of the lender.

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 products, 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.


A separate legal entity that must be registered as a taxpayer in its own right. A company either trades for profit (public, private, state-owned, or personal liability) or not (non-profit).

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.

Consumer Price Index

A statistics-based indicator widely used by economists to ascertain the rate at which the prices of consumer goods and services are rising.

Contempt of court

Failure to abide by an order of a court of law.

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.

Contrarian investor

An investor who purposefully chooses to go against market sentiment and the investments currently in favour.  A contrarian investor will sell popular investments when others are flocking to buy them and will buy investments that most investors are shunning.


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. 


A co-payment is a portion of the cost of a health service not covered by your medical scheme that you, as a member, have to pay for out of your own pocket.


Your total salary package including your pre-tax basic salary and any other benefits provided. 


An old term for interest payments on bonds.

Credit agreement

This is the contract you enter into with a credit provider when you buy goods or services on credit or borrow money from a credit provider and agree to pay interest and/or fees and charges.

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 provider

A credit provider allows you to borrow money or buy goods or services on credit and is registered with the National Credit Regulator.

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.

Credit score

A three-digit number recorded on your credit report that sums up your credit risk.


A person or company that is owed money.

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.

Current ratio

This ratio shows the ability of a business to pay off its current liabilities or debts using its current assets – assets the business can convert into cash within a year like cash in the bank, stock or money owed to the business.


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 or optometrist and includes medication, blood tests, x-rays and other scans.

Death benefit

The proceeds of a life insurance policy or in the case of a retirement fund, your savings and any group life insurance benefits from a scheme approved by the fund.

Debit card

A card issued for a cheque, current or transactional bank account that allows you to make payments by swiping the card at shops, restaurants and other merchants. The amount you pay is reserved or deducted from your balance immediately, so you are unable to spend more than you have in your account.

Debt collector

A person who collects debts on behalf of a creditor who is either employed full time by the creditor or is an independent third-party debt collector

Debt consolidation

A loan used to consolidate many different debts into one, either by paying them off or providing cash to do so. You are then left with only one bigger loan to repay.

Debt counselling

A legal process involving a debt counsellor drawing up a more affordable way for you to repay your debt. The plan must be acceptable to your creditors and is made an order of court.

Debt counsellor

A debt counsellor can help you to apply for debt review and have your debt repayments rearranged to make it more affordable for you to repay your debts.

Debt review

A legal process that aims to find a more affordable way for you to repay your debt that is acceptable to your creditors.


The process of reducing the carbon emissions of a company, industry or country.

Debt-to-equity ratio

This is a business’s liabilities or debts divided by the shareholder capital invested in the business. It shows how the business has used that capital to leverage or gear the business.


A person or company that owes money

Deemed disposal

When calculating capital gains tax, a deemed disposal of your assets occurs when you die or emigrate.

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.

Default investment strategy

The investment strategy that trustees are obliged to set up in terms of regulations under the Pension Funds Act for retirement fund members. It may be the only investment strategy for the fund, or if the fund offers a choice of strategies, it is the one in which members’ savings will be invested when they fail to make their own choice.   

Default judgment

A default judgment is issued when you fail to defend a summons or pay the amount claimed. 

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.

Demo model

A new car that is sold at a discount because it has been on the floor of a dealership and test driven by potential buyers.


These are securities that derive their value from another security. An example of this is an option to buy a share on the JSE.

Designated service provider

The healthcare provider, such as a doctor, hospital or pharmacist, that your scheme has named in its rules as the one you must use in order to enjoy cover for the prescribed minimum benefits.

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.


A person who is appointed by the shareholders and manages a company. They are generally part of a team of directors who jointly make policy decisions and set direction for the organisation. Usually the managing director leads the company.

Disability cover

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

Discretionary fund manager

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 investment fund manager.

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 programme to help you manage an illness with medication, monitoring as well as education and changes to your lifestyle.


When calculating capital gains tax, a disposal includes selling or donating an asset, or switching an investment. Destruction or expropriation of your asset is also a disposal.


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. 

Downside risk

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

Drawdown rate

The percentage drawn as an income or pension from an investment linked living annuity.


Money withdrawn from a sole proprietor or partnership by the owner /partner for personal use.

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. 

Dual listed

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

Due diligence

Taking reasonable care, especially when recommending a product or service, to ensure it is legal, financially sound and can achieve what it promises to do.


The period until a bond, or similar security, matures and the sensitivity of the price of the bond to changes in the yield. Securities with higher durations are more sensitive to changes in the price of the security.

Effective annual cost

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.

Emoluments attachment order (EAO)

An order made by a court to attach a portion of a debtor’s income. Also referred to as a garnishee order.

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.


Environmental, social and governance (ESG) factors that can be considered together with financial factors in investment decision making.

ESG rating

A rating or measure a business or investment achieves when its environmental, social and governance factors are measured by a ratings agency using its ESG measures.  

ESG score

A score or measure a business or investment achieves when its environmental, social and governance factors are measured by a ratings agency using its ESG measures.  

ESG screening

Screening out shares, bonds or other securities that rate poorly on ESG factors.


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.

Ethical investing

Avoiding investments in goods or services that harm the environment, a community or individuals, that do not meet personal values of no gambling or pornography, for example.


The first portion of an insurance claim that you must pay.

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).

Faith-based investing

Investments that adhere to the principles of certain religions, such as Shariah investments that adhere to the principles of the Islamic religion.

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.

Fiduciary duty

The obligation on a person or entity, such as a trustee or a financial adviser, who is acting on behalf of another person or group of people, to act in the best interest of that person or those people.

Financial assets

An investment in a financial instrument that gives you legal rights, such as a share or bond.


Technology aimed at providing you with automated financial products or services.

Fixed interest investment

Investments that you earn 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.


This is a shortening of the two words foreign exchange. It is used to refer to the market where buyers and sellers exchange one currency for another. 


A list of effective and cost-efficient prescription medicines – often including generic medicines - that your medical scheme covers.

Fossil fuels

Natural sources of energy such as coal, oil and gas that release carbon into the atmosphere when burned to create energy.

Free cash flow

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

Free float

The shares that are available for the public in a particular country to buy and sell.

Fringe benefit

Benefits other than wages or salaries that employees receive. It includes private use of a company vehicle, low interest or interest free loans, long service awards and acquiring an asset at less than the actual value. The value of this benefit is added to your salary and you are taxed on this.

Fundamental analysis

Researching a share, bond or other security using information such as the company’s financial statements as well as information about the industry, competitors and markets to see if is priced correctly.

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.


The expansion of businesses into other parts of the world, increasing trade relations between countries and the reliance on exports and imports between them.

Global warming

The rising temperatures due to human activity around the world and the impact thereof.

Grace period

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

Green bonds

Bonds issued to raise capital for projects that benefit the environment such as renewable energy projects or water recycling.

Green investments

Investments that focus on improving the environment or minimising damage to it.

Greenhouse gases

Gases, including carbon dioxide and methane, that trap heat close to the surface of the earth causing climate change


When a company or investment provider creates a false impression or provides misleading information about the positive impact of the business or investment on the environment.

Gross pay

The amount you earn before deductions from your salary.

Gross profit margin

This is the gross profit as a percentage of the sales or turnover. The gross profit is what a business makes from selling its goods or services less the cost of those goods or services.

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. 

Hydrogen economy

Using hydrogen instead of more carbon intensive energy sources for things such as electric vehicles, heating and power generation.

Identity theft

When your personal information is used by criminals to assume your identity and acquire retail or bank accounts, or even defraud your insurance, medical aid and the Unemployment Insurance Fund.

Impact investing

Impact investors invest in businesses or organisations or projects that target an outcome that benefits society or the environment, such as education, affordable housing or renewable power generation.


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.

Incidental credit agreement

When you get goods or services that you agree to pay for on presentation of an account, and interest is only payable if the account is not paid by a specified date, or you are quoted a lower price to settle the account within a specified period.

Inclusion rate

The percentage applied to any net capital gain to determine the taxable capital gain that is included in your taxable income.

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.

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.

Inter vivos trust

An entity controlled by trustees to manage assets for the benefit of the trust’s beneficiaries. This trust is set up by a founder during their life by way of a trust deed that guides the trustees on how to manage and distribute the trust’s assets.   


You are insolvent when your debts exceed your assets.

Institutional investor

An institution such as a retirement fund, life insurance company or asset management company that invests large sums on behalf of its clients or members.

Interest coverage ratio

This ratio measures a business’s ability to service the interest on its debt. It is calculated by dividing the business’s earnings or profits before tax and interest are deducted, by the interest due.


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.

Inventory turnover ratio

This ratio gives an indication of how slowly or quickly a company holds stock or inventory before it sells it. It is calculated by dividing the cost of the goods sold over a period (eg a quarter or year) and dividing it by the average value of the stock or inventory held over the same period.

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.

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.

Inward listing

A share, bond or derivative for a foreign entity that is listed on a local exchange and settled in rands.


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 a 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.

Keyman insurance

A life or disability policy on the life of an employee whose contribution to the business is crucial. The policy is owned and paid for by the business, so the proceeds are paid directly to the business.

Key person

A person whose role, skills, experience or relationships with clients are key to the success of a business.

Key person insurance

A life or disability policy on the life of an employee whose contribution to the business is crucial. The policy is owned and paid for by the business, so the proceeds are paid directly to the business.


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 these are 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 a 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. 

Legal entity

An individual, company, or organisation that is legally permitted to enter into a contract, for the purchase, sale, or lease of real property.

Letter of demand

When you are party to a contract and you fail to keep to the terms of the contract, the other party sends you a letter of demand. It is often a precursor to litigation or your matter going to court.


Trading or investing using borrowed money. This can multiply gains but can equally multiply losses.

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.

Life insurance

Insurance that pays out the insured sum 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.

Liquidation and distribution account

A list of the assets and liabilities or debts in an estate as well as a record of how the remaining assets in an estate are to be distributed to the heirs.


To sell assets for cash. An asset is said to be illiquid if it is hard to sell.


The ease with which an asset can be sold. An asset is said to be liquid if the owner can sell it quickly and easily.

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.

Living will

A written document in which a person outlines their wishes regarding future medical treatment in instances where they are no longer able to communicate these wishes, such as if they were in a coma or on life support.


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.

Lifestyle financial planning

Financial planning in which advisers engage you on your life goals and how to structure your finances to achieve those goals in a sustainable way.

Major medical benefits

Benefits for expenses associated with serious illness or hospitalisation.

Management committee

A committee set up at each employer participating in an umbrella fund to represent the members from that employer.

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.

Market neutral strategy

A hedge fund strategy that involves taking both long and short positions with a view to achieving a positive return regardless of what equity markets deliver.

Market timing

When an investor tries to maximise returns by timing the decision to buy or sell a security, or exposure to a market, to coincide with a rise or fall respectively in that security, or market.

Market value

The value something could be sold for in the market, for example, the share price of a listed share or the value of property determined by a professional property valuator.

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 scheme

When you join a registered medical scheme, you pay a monthly contribution to enjoy certain regulated benefits for healthcare services as well as others the scheme's trustees decide to provide. Typically, you enjoy good cover for hospital events and other major medical expenses and some day-to-day benefits. 

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 of 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.

MSCI World Index

An index made up of large and mid-cap shares in more than 20 countries representing developed markets.

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.


A manager that selects and blends together a number of other investment managers specializing in different asset classes and/or investment philosophies to manage the money in a portfolio to deliver good returns at low risk.  

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.

National health insurance (NHI)

The proposed new healthcare system for South Africa that will pool all funding for healthcare, purchases services through a central fund and cater for everyone regardless of whether they can afford to pay or not.

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.

Net capital gain

The aggregate capital gain less any assessed capital loss brought forward from a previous tax year that has a positive result.

Net profit margin

This is the net profit expressed as a percentage of sales or turnover. The net profit is what a business makes from selling its goods or services less the cost of those goods and services, and all the business operating costs and taxes.

Net zero

A global goal set in Paris in 2015 to neutralise greenhouse gases and carbon emissions to an effective zero by 2050 and thereby reduce global warming to 1.5°C.

Non-profit company (NPC)

A company that exists for non-profit purposes and often for public benefit. This kind of company can be registered with the Department of Social Welfare as a Non-Profit Organisation (NPO) which can apply for government funding and/or to obtain a fundraising number. It can also apply for Public Benefit Organisation (PBO) status which enables it to apply for a tax-exempt status from the South African Revenue Service and, if approved, donations made by donors are tax deductible. Income may not be distributed to members, incorporators or directors, other than to compensate them for their services and upon dissolution, the assets of the company must be ceded to another non-profit company with a similar goal.

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 those 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 a human stockbroker whom you can call or visit.

Online stockbroker

A stockbroker that offers investors the ability to buy or sell shares or other securities through an online or internet-based platform. 

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.

Opportunity cost

The value you lose when selecting one option, as opposed to another.


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 from your marriage the assets you own when you marry. 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.


You are over-indebted if you are unable to make your debt repayments given your income, your prospects, obligations, and all your credit agreements.

Over-the-counter medicines

Medicines you can buy from a pharmacy without a doctor’s prescription.

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.

Paid up

An investment policy, such as a retirement annuity, is paid up when no further contributions will be made but the savings remain invested.

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.

Paris Agreement

The binding international treaty to limit global warming to below 2°C that was adopted by 196 parties in Paris in 2015 and entered into force in 2016.

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.

Participating employer

An employer that participates in an umbrella retirement fund by signing up employees and contributing on their behalf.


A formal agreement between two or more parties (maximum 20) to operate a business. It can be formed between individual people or between individuals and a legal entity. Partners share in the profits and expenses of the business, and the terms are usually formalised in a Partnership Agreement.

Passively managed

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

Pawn transaction

When you borrow money with a view of repaying the amount plus interest before a certain date. You provide an item of high value as security for the loan and if you are unable to repay in time, this item can be sold to settle your loan.

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. 

Personal liability company (Inc)

A private company that is mainly used by 'associations' of professionals such as lawyers, engineers and accountants. It is set up by a Memorandum of Incorporation and the name of the company ends in ‘Incorporated’.  The directors (current and past) are responsible for the debts and taxes of the company.

Ponzi scheme

A type of investment scam in which returns do not come through genuine profits; instead, existing investors are paid returns from the capital of subsequent investors.  When new recruits dry up, the scheme collapses. Named after Charles Ponzi, Italian con artist (1882-1949)

Power of attorney

Legal authorisation for another person to act on your behalf if you are unable to do so yourself. This can include financial, property related and medical decisions.

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.


A debt can prescribe if the credit provider makes no effort to collect the debt from you for three years or more.

Prescribed minimum benefit

A benefit that a scheme must provide by law, 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.

Preventative screening benefits

Benefits for screening tests to detect illnesses early and prevent them becoming more serious, for example, cholesterol screening, glucose tests, HIV screening tests, mammograms, pap smears, prostate cancer tests, bone density scans or glucose tests.

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.

Primary healthcare

The first line of healthcare you access, for example at a clinic or general practitioner, to manage your illness, get help preventing diseases, be rehabilitated after illness or injury and obtain palliative care at the end of your life.

Primary healthcare plans

Low-cost plans that, in return for a monthly premium, offer cover for day-to-day healthcare, such as 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.

Primary listing

The share market on which a company’s shares were first listed.

Primary rebate

A tax credit you enjoy each year to ensure you do not pay tax on income earned below the threshold or the income level from which tax applies.

Primary residence

The home in which you or your spouse ordinarily live and which is used mostly for domestic purposes. It must be owned by you as a natural person or by a special trust.

Private equity

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

Private company (Pty) Ltd

A separate legal entity with rights and duties of its own.  It must be registered through the Companies and Intellectual Property Commission (CIPC) and is a registered taxpayer in its own right. It has a life separate from its owners, who are the shareholders.

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 tax

A way of paying income tax on taxable income you earn. It obliges taxpayers to declare income and pay tax during the tax year instead of only on assessment at the end of the tax year. It applies to income on which tax is not withheld and paid over by an employer or pension provider.

Provisional taxpayer

A provisional taxpayer is any one who receives taxable income from which pay as you earn tax is not deducted. 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.

Proxy voting

Shareholders vote by proxy at a company’s annual general meeting when they authorise another person or entity, such as an asset manager, to vote on their behalf.

Public company (Ltd)

A separate legal entity which has rights and duties of its own. It must be registered through the Companies and Intellectual Property Commission (CIPC) and is a registered taxpayer. It is usually listed on a stock exchange like the Johannesburg Stock Exchange (JSE) where the company shares can be freely traded by members of the public. There will be additional governance requirements such as mandatory audits, numbers of directors and shareholders.

Public offering

The issuance and sale of shares by a company on a stock exchange in order to raise capital.

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 and services is eroded. 

Quality share

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

Qualified investor hedge fund

A hedge fund with fewer restrictions on borrowing or gearing and investments in private equity. These funds are only available to investors with R1 million to invest and an appreciation of the risks.

Quick ratio

This ratio shows the ability of a business to pay off its current liabilities or debts using more liquid current assets – those assets the business can convert into cash within 90 days like cash in the bank, stock or accounts that should be paid within 90 days.

Rand-hedge shares

A share listed on the South African share market that earns profits from offshore operations in currencies other than the rand. As these profits are protected from depreciation in the rand against other currencies, they are referred to as rand hedges.

Real assets

An investment in a physical thing that you own, such as property or gold coins.


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 period of reduced economic activity typically identified by a fall in gross domestic product for two successive quarters.

Reckless lending

When a creditor gives you more credit than you can afford or grants credit without assessing whether you can afford the credit.

Reimbursement rate

The rate at which your medical scheme reimburses doctors and other healthcare providers. Schemes reimburse at their own rates or multiples of them depending on the option. Providers may charge multiples of the scheme rates.

Repurchase rate

The rate at which the South African Reserve Bank lends money to the commercial banks. The banks lend on to consumers at rates based on the repurchase or repo rate. 


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.

Resident (for tax purposes)

You are defined as a resident (for tax purposes) of South Africa if this is the country to which you return after any trips and where you have your principal residence. You may be deemed to be a resident if you are physically in South Africa for a certain number of days in the current tax year and the five years before the current year (you meet the physical presence test requirements).


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

Responsible investing

Investment choices incorporating not only financial concerns, but also taking the social and environmental impact of the investment into account, to better manage risks and generate sustainable, long-term returns.


When you are in arrears on your home loan and you can’t pay the arrears in one lump sum, your creditor may be willing to add the arrears to the amount owing and charge you a higher monthly instalment. If you can afford the higher monthly instalment, this is preferable to a restructure, which increases the term of the loan and hence the amount due to your creditor.

Restricted medical scheme

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


When a credit provider restructures your debt, your repayment term is extended so that your monthly instalment is reduced and made more affordable.   

Retail hedge fund

A hedge fund with that only borrows or gears the fund and invest in unlisted securities within regulated limits. These funds must publish their price daily or monthly and pay out withdrawals within a month.

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.

Return on assets (ROA)

This is the net profit expressed as a percentage of the average value of a business’s assets and shows how efficiently the assets are used to generate profits.

Return on equity (ROE)

The net profit expressed as a percentage of the shareholder capital invested in the business or the value of the shares issued. It shows how efficiently this capital is used to generate profits.

Risk capacity

Your ability to take investment risk.

Risk equalisation

Equalising costs, such as those of a medical scheme, that differ as a result of the different ages and health of members. Without risk equalisation, a scheme with older, sicker members has to charge higher contributions.

Risk equalisation fund

A fund that serves to equalise the costs of providing a benefits, such as a medical scheme benefit, across members with different ages and health statuses. The fund would collect payments from schemes with healthier, younger membership profiles and pay schemes with sicker, older members.

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-year period within a 20-year period.

Sale in execution

This is a public auction of a mortgaged property by the Sheriff of the Court.  When your property sells on auction, you are liable for any shortfall – namely the difference between what the property is sold for and what is owed on the bond, plus interest and the costs incurred by the bank to sell the property at the sale in execution.


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.

Section 129 notice

A notice issued under the National Credit Act that alerts you that you are in arrears, that you have certain options and limited time in which to exercise these options.

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.

Second hand policy

An endowment policy that is purchased from someone else.

Self-payment gap

The gap in medical scheme cover when you have depleted your medical savings account but do not yet qualify for above threshold benefits. This only applies to medical scheme options that offer above threshold benefits.

Sequence risk

The risk of earning higher and lower returns in an order that disadvantages you, particularly when you are near retirement or drawing an income from investments.

Sequestration order

A court order declaring you insolvent and appointing trustees to take control of your financial affairs, sell your assets and pay your debtors.

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.


A person or entity who holds shares in a company.

Shariah-compliant investments

Investments that comply with the Islamic principles, or Shariah, that apply to financial transactions.

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.


A court official whose duty it is to serve or execute summonses, notices, warrants, orders and other documents issued by the court.

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.

Social solidarity

A collective commitment to a system, such as the provision of healthcare in which people pay according to their means and receive benefits according to their needs.

Socially Responsible investing

Investment choices incorporating not only financial concerns, but also taking the social and environmental impact of the investment into account, to better manage risks and generate sustainable, long-term returns.

Sole proprietor

The simplest form of business entity where the business is owned and operated by one person who can keep all profits but also is responsible for all expenses in the business. There are no legal boundaries between the business owner and his/her assets.

Special trust

A trust created exclusively for the benefit of a minor or someone who has a mental or physical disability and is unable to manage their own affairs.


To take short-term “bets” on assets such as shares or cryptocurrencies.


The entity that sets up a retirement fund – an employer in an employer-sponsored fund or financial institution or union in the case of an umbrella retirement fund.

Standard deviation

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

Stock market

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

Stock market bubble

When share prices have been rising for an extended period and prices are above the value of the underlying companies.

Stock pickers

A manager who specialises in researching and selecting individual shares.


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. 

Strategic asset allocation

A fixed allocation to different asset classes to which a manager will regularly align a portfolio.  The allocation is typically chosen to target a level of returns at a set level of risk.


A fund within an umbrella fund for the members of an individual employer.

Succession planning

The identification and development of individuals earmarked for the future management and / or ownership of a business


An Islamic asset class similar to a bond that is backed by a tangible asset such as property.

Summary judgment

This can be handed down in an application to court if the court agrees that the defendant has no genuine defence. The matter does not proceed to a hearing and the judgment is issued summarily.


A summons sets out the specifics of the case or claim that your creditor has against you, the debtor. You have 10 business days to state whether or not you plan to defend the matter.


An agreement or guarantee to repay a debt if a lender defaults.

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. 

Sustainable investing

Investing with a focus on ensuring the sustainability of businesses by measuring environmental, social and governance (ESG) factors.

Tactical asset allocation

Asset allocation decisions to deviate from the regular asset allocation of the portfolio to take advantage of market conditions.

Task Force on Climate-Related Financial Disclosures (TCFD)

A task force created by the international Financial Stability Board to develop standardised climate-related financial risk disclosures for companies, banks and investors.

Taxable capital gain

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.

Tax credit

An amount you become entitled to that reduces the tax you owe the tax authority.

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.

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.

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. 

The 2°C limit

The limit on the increase in global temperatures required by the end of this century in order to stave off the worst natural disasters that global warming could bring.

The sustainable development goals

The 17 goals for global peace and prosperity adopted by the United Nations in 2015. Each goal can be classified as one of the ESG factors.

Thematic investing

Investing with a theme such as climate change.

Thematic investment

Investing in shares or other securities in line with an economic trend or investment theme that is expected to deliver good returns over time.

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.

Title deed

The document that proves property ownership after the property has been transferred into your name.

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.


In financial terms this refers to buying and selling assets such as shares over short periods in order to turn a quick profit. This is different from investing, where you hold an asset over a longer term.

Trading on margin

Using leverage to trade an asset worth more than you are willing, or can afford, to pay. Trading on a 10 percent margin means you contribute 10 percent of the price, with the broker “lending” you the other 90 percent.

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.

Treatment protocols

A detailed plan for the treatment of a medical condition that may not be less than what you are entitled to in state hospital or clinic.


A legal arrangement in which assets are held by a trustee or group of trustees for the benefit of the trust’s beneficiaries.


A person managing assets held in a trust on behalf of the beneficiaries of the trust.

Or, in the case of a unit trust fund, the company that holds the assets of the unit trust fund in safe custody.

Turnover tax

A simplified system that replaces income tax, provisional tax, capital gains tax and dividends tax for micro businesses (sole proprietors, partnerships, companies and close corporations) with a qualifying annual turnover of R 1 million or less.

Two-pot retirement system

The splitting of retirement savings after 1 September 2024 into two pots – a savings pot for one third of contributions that can be accessed before retirement and a retirement for two thirds of contributions that cannot be accessed before retirement.

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.

Unemployment Insurance Fund (UIF)

The government fund to which employees must contribute and from which you can claim short-term benefits if you became unemployed, or are unable to work due to illness or maternity leave. Your employer pays 1% of your salary, and you another 1%, which is deducted and paid to the fund each month.

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.

Universal health coverage

A healthcare system that gives everyone access to quality health services for all their needs without financial hardship. The World Health Organization (WHO) has set this as a priority goal for all countries.

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.

Venture capital

Investments made into shares in start-up businesses that are likely to grow quickly and realise a profit for the venture capitalists in five to seven years.


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. 

Voluntary surrender

A process in which you turn the car or other goods over to the lender because you can no longer afford the repayments.

Waiting period

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

Warrant of execution

The court document that authorises the Sheriff of the Court to collect your assets to sell them to pay your debt.

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).