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Cash interest explained |
You will receive interest on balances in your platform cash account at the prevailing rate.
Embark Investment Services Limited acts as the custodian for investments on the Willis Owen platform and is one of our strategic partners that provides our Willis Owen ISA, GIA, Junior ISA and SIPP.
Embark places cash with a number of banking partners for safekeeping and to provide the potential for you to earn interest on money in your platform cash account. By managing cash in this way, it aims to provide better protection and a higher overall level of interest than if all funds were placed with a single bank.
The rates of interest paid by banks will vary. Embark retains a portion of the interest earned to cover its costs in managing platform cash.
Current Interest Rate
The table below shows the current customer interest rate payable on cash balances along with the amount of interest retained by Embark. The customer interest rate shown is that after accounting for interest retained by Embark:
| Date From | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 12th June 2024 | 2.6% | 1.75% - 2.00% |
Embark can change the rate of interest at any time and it reviews the position at least quarterly. Interest is calculated and accrued daily and is credited to your account on the first of each month. If you transfer out, accrued interest is applied at the point of transfer. We will inform you if and when the interest rate changes as soon as is practicable.
Interest retained
The table below shows the yearly equivalent rates of interest Embark expects to pay based on a range of possible yearly interest rates it may earn.
| Interest Embark expects to earn | Customer Interest Rate | Interest retained by Embark |
|---|---|---|
| 0-1% | 0 – 0.46% | 0 – 0.54% |
| 1-2% | 0.46% – 0.94% | 0.54% – 1.06% |
| 2-3% | 0.94% – 1.46% | 1.06% – 1.54% |
| 3-4% | 1.46% – 2.02% | 1.54% – 1.98% |
| 4-5% | 2.02% – 2.61% | 1.98% – 2.39% |
| 5%+ | 2.61%+ | 2.39%+ |
Historic Interest Rates
To see details of historic customer interest rates, along with the amount of interest retained by Embark, click here.
Equity Styles Explained |
Market capitalisation is an indication of the size of the companies being invested in. It is calculated by multiplying the number of shares issued by the company by the current share price. Market capitalisation is divided into ‘large’, ‘medium’ or ‘small’ according to the below:
Large – Companies that have a market capitalisation greater than $10 billion.
Medium – Companies that have a market capitalisation between $2 billion and $10 billion.
Small – Companies that have a market capitalisation below $2 billion.
Companies can be categorised as ‘value’, ‘blend’ or ‘growth’ as defined below:
Value – Companies that are considered to be trading at a share price below what their fundamentals would suggest.
Blend – Companies that do not exhibit solely value or growth characteristics.
Growth – Typically well-established companies which are considered to have above average prospects for long-term growth.
Equity Regions Explained |
Equity region indicates in which countries the underlying shares within your portfolio are listed.
USA – Companies listed on a stock market in the USA.Canada – Companies listed on a stock market in Canada.
Latin America – Companies listed on stock markets in the Caribbean, Central America and South America, such as Mexico, Brazil and Argentina.
United Kingdom – Companies listed on a stock market in the United Kingdom, Guernsey, Isle of Man and Jersey.
Eurozone – Companies listed on stock markets in countries which have the Euro as their official currency, such as France, Germany and Spain.
Europe ex Eurozone – Companies listed on stock markets in western European countries which do not have the Euro as their official currency, such as Denmark, Sweden and Switzerland.
Europe Emerging – Companies listed on stock markets in European emerging markets, such as Poland, Russia and Turkey.
Africa – Companies listed on stock markets in African countries, such as Egypt, Nigeria and South Africa.
Middle East – Companies listed on stock markets in Middle Eastern countries, such as Israel, Qatar and Saudi Arabia.
Japan – Companies listed on a stock market in Japan.
Australasia – Companies listed on stock markets in Australia and New Zealand.
Asia Developed – Companies listed on stock markets in developed Asian countries, such as Hong Kong, Singapore and Taiwan.
Asia Emerging – Companies listed on stock markets in emerging Asian countries, such as China, India and Thailand.
Equity Sectors Explained |
Cyclical – Companies which operate in industries that are considered to be significantly affected by economic shifts. When the economy is prosperous, these industries tend to expand and when the economy is in a downturn they tend to shrink.
Basic Materials - Companies that manufacture chemicals, building materials and paper products. This sector also includes companies engaged in commodities exploration and processing.
Consumer Cyclical - This sector includes retail stores, auto and auto-parts manufacturers, restaurants, lodging facilities, specialty retail and travel companies.
Financial Services - Companies that provide financial services include banks, savings and loans, asset management companies, credit services, investment brokerage firms and insurance companies.
Real Estate - This sector includes companies that develop, acquire, manage and operate real estate properties.
Sensitive – Companies that operate in industries that ebb and flow with the overall economy, but not severely. Sensitive industries fall between defensive and cyclical, as they are not immune to a poor economy, but they also may not be as severely affected as cyclicals.
Communication Services - Companies that provide communication services using fixed-line networks or those that provide wireless access and services. Also includes companies that provide advertising & marketing services, entertainment content and services, as well as interactive media and content provider over internet or through software.
Energy - Companies that produce or refine oil and gas, oilfield-services and equipment companies and pipeline operators. This sector also includes companies that mine thermal coal and Uranium.
Industrials - Companies that manufacture machinery, hand-held tools and industrial products. This sector also includes aerospace and defence firms as well as companies engaged in transportation services.
Technology - Companies engaged in the design, development and support of computer operating systems and applications. This sector also includes companies that make computer equipment, data storage products, networking products, semiconductors and components.
Defensive – Companies which operate in industries that are relatively immune from economic shifts. These industries provide services that consumers require in both good and bad times.
Consumer Defensive – Companies that manufacture food, beverages, household and personal products, packaging, or tobacco. Also includes companies that provide services such as education and training services.
Healthcare – This sector includes biotechnology, pharmaceuticals, research services, home healthcare, hospitals, long-term-care facilities and medical equipment and supplies. Also includes pharmaceutical retailers and companies which provide health information services.
Utilities - Electric, gas and water utilities.
Product Involvement Explained |
Product Involvement metrics measure the percentage of a portfolio's assets exposed to a range of business areas and activities. For example, if a fund's involvement in Animal Testing is 20%, that means 20% of the fund's assets are invested in companies involved in Animal Testing.
Exposure percentages are calculated by summing the weights of a portfolio’s holdings in the companies involved in each area. In most cases a company is considered ‘involved’ in a certain area if it's revenue from that area exceeds a certain minimum threshold. In other areas, for example animal testing, abortion, contraceptives and human embryonic stem cell research, there is no revenue threshold such that if the company has any involvement at all in these areas, it will be considered involved. If a company is considered involved in an area, the entire weight of that company in a portfolio is counted when determining the overall percentages shown.
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ESG Pillars Explained |
Morningstar's ESG Pillar Scores help investors understand how a fund is performing in three key areas: Environmental (E), Social (S), and Governance (G). These scores break down the overall sustainability risk of a portfolio into these specific categories.
Each score reflects how much environmental, social, and governance factors contribute to the overall risk of companies in the fund. The scores are averaged based on the size of each company in the portfolio. Lower scores mean lower risk.
To receive these scores, at least 67% of the fund’s assets must be rated for their ESG risk. This provides investors with a clearer view of a fund’s exposure to sustainability risks in different areas.
Asset Allocation Explained |
Equity – Often referred to as shares. Shares are units of ownership in a company which entitle the holder to certain rights for example to exercise voting rights or to participate in the company’s profits.
Fixed Income – Often referred to as fixed interest or bonds. When you invest in bonds, you are typically lending money to a company or a government in return for a defined series of interest payments and the promise that a defined value (called the ‘face’ or ‘par’ value) will be returned at a certain point in time
Property – Investments in property include residential, offices, warehouses and shopping centres.
Cash – Money held in cash or cash-like instruments, often to ensure there are sufficient liquid assets within a portfolio.
Other – Contains other investments such as commodities, preferred stock and derivatives.
Here you’ll find a simple explanation of some of the most commonly used investment terms. If there is any other financial jargon you want translated, please call our Customer Service Team free on 0800 597 2525 or email us at enquiries@willisowen.co.uk and they will be pleased to help.
A physical replication method where a fund will buy a proportion of stocks in the index, that the manager feels will still fully replicate the performance of the index.
Instruments traded on the stockmarket. These are usually shares or government bonds.
The process where a fund lends out the shares or bonds it holds to a third party in return for a fee. The fund will typically buy other assets to protect itself from the risk of loss. The process allows the fund to generate extra revenue and lower its costs but can give rise to risks, for instance where borrower becomes insolvent or the value of any collateral falls below the value of the asset which was lent out.
Stock Exchange Daily Official List numbers issued for Unit Trusts, OEICs and shares. SEDOL numbers are unique numbers allocated to UK (and Irish) securities which enable them to be easily identified by stockbrokers and market makers. The numbers are allocated by the UK Stock Exchange. SEDOL numbers (and ISIN numbers) are also quoted in the Financial Times.
A share class is a designation applied to a specified type of security such as common stock or fund unit. As an investor, it's important to know what class of shares you are buying, be it common stock in a public company or units of a fund.
Each class can have different characteristics such as charging structures, currencies or choice of distributions.
The reduction of the percentage of equity in a company through issuing additional stocks that’ll be put up for sale. The dilution occurs when existing shareholders’ percentage of equity in a company is reduced, enabling the freed-up stock to be used for raising capital.
A scheme enabling investors to exchange existing holdings for shares in an OEIC. These schemes can often be of great benefit as some shares can be sold without paying dealing expenses.
These are stakes in the ownership of companies. Shares traded on the stock market are also known as equities. There is no maturity or redemption date and shareholders not wishing to hold the shares any longer must sell in the market.
Sharia compliant investing is a form of socially responsible investing that is governed by Sharia law and the principles of the Muslim religion. Basic guidelines include the prohibition of Riba (interest), Gharar (speculation or chance) is not allowed, and not investing in certain businesses or industries that are considered Haram (forbidden).
At Willis Owen when we talk about short term we are referring to investments that are expected to last for fewer than five years.
SICAV - Société d’Investissement à Capital Variable
This is the European (offshore) version of an 'OEIC' – it is an investment company that is 'open-ended’ (i.e. its shares can be bought or sold on any dealing day).
Instead of having an Authorised Corporate Director (ACD), a SICAV tends to have a board of individual directors, which may or may not appoint an investment manager.
A single price is calculated by taking the average of the buying and selling prices of each of the assets held in a fund (their mid market prices). With the single pricing system, any initial charge the manager may take is charged separately, rather than being included within the difference between the buying and selling prices (the spread) which is the case with dual pricing.
An effect of the single pricing system is a possible dilution in the value of a fund when investors buy and sell shares. However, most fund managers operating a single pricing structure will have measures to protect the investors if they see large inflow or outflow into/ out of the fund.
A strategy which combines active investing with passive investing. Smart beta funds aim to enhance the returns of an index by targeting specific factors that may outperform.
Socially Responsible Investing
Socially responsible investing (SRI), also known as social investment, is an investment that is considered socially responsible due to the nature of the business the company conducts.
Socially responsible investments can be made into individual companies with good social value, or through a socially conscious fund or exchange-traded fund (ETF).
A ‘soft close’ is a term that is used to cover a variety of actions that an investment group takes to try and stop a fund becoming too large. Read more
The current market price of a security at that given time.
A tax payable on purchases of UK equities. In addition, in certain circumstances an authorised investment fund may pay a small, additional amount of SDRT calculated on the basis of transactions in the fund units or shares, and the proportion of taxable assets of the fund.
The standard deviation measures how much a fund’s total returns have varied in relation to its historic mean, usually calculated on the most recent 36 monthly returns. It is the most common risk measure used by investors as a gauge for the amount of expected volatility. A volatile fund will have a high standard deviation while a stable fund will show a low standard deviation. The standard deviation is expressed in percentage terms, like the returns.
Morningstar's corporate Stewardship Rating represents an assessment of management's stewardship of shareholder capital, with particular emphasis on capital allocation decisions.
Analysts assign one of three stewardship ratings: "exemplary", "standard", and "poor". Analysts judge stewardship from an equity holder's perspective. Ratings are determined on an absolute basis. Companies are judged not against peers within their industry, but against ideal stewardship of shareholder capital. Most companies will receive a standard rating, and this should be considered the default rating in the absence of evidence that a management team has made exceptionally strong or poor capital allocation decisions.
An OEIC can be made up of a single fund or a series of funds (sub-funds) under an umbrella OEIC.
A type of derivative contract where two parties agree to exchange cashflows or liabilities of two different financial instruments (for example shares or bonds) over a specific period.
When you move an investment (or part of it) out of one fund and into another.
Where a fund will replicate an index by using derivatives, such as swaps. This is used, by some managers, as an alternative way of replicating an index which does not involve buying conventional assets like shares or bonds.
