Glossary
Face value
The amount repaid on a bond or income security at maturity and the amount on which distributions are calculated.
Fast Growers
Small and aggressive young companies that grow at 20 to 25 per cent a year. These companies have often established a good niche within their particular industry, but risk is higher than with slow growers or stalwarts. One of Peter Lynch's six categories of stocks.
Financial year
The period over which a company measures its performance. The most common financial year ends on 30 June every year.
Fixed interest
A type of debt that pays a fixed annual rate of interest.
Float
A new issue of shares in a company before it lists on the stock exchange.
Franked Dividend
A dividend that carries tax advantages for shareholders. A percentage of the dividend paid by a company can be franked, up to 100%. The idea behind imputation credits (which lead to franking) is that companies have already been taxed on the money they earn. When they go to pass on dividends to shareholder, therefore, they should not be taxed again. On the franked portion of a dividend, shareholders pay the difference between their own marginal rate of income tax and the rate of corporate tax that the company has paid.
Franking
The percentage of the dividend on which the company has already paid tax.
Full service broker
A broker who provides you with advice on securities transactions, and other services such as research and access to floats.
Fund manager
A professional who buys and sells investments for a managed fund.
Fundamental Risk
This rating has two components. The first is a stock's underlying business strength. Here, we look at a company's competitive position and management expertise, its products and the general industry dynamics. Secondly we look at financial strength, which refers to our assessment of the company's debt and other obligations, like operating leverage, which may lead it to financial distress. We then combine these factors into a single rating-fundamental risk. Market-dominant, well-managed companies with low debt enjoy a low risk rating and poorly managed, highly geared companies in competitive markets suffer a high risk rating.
Fundamentals
A company’s financial and operational details. Fundamental analysts assess these factors in an attempt to determine the long-term performance of the business, and ultimately, the company’s share price performance.
