Where is the CTF invested?

An asset is a type of investment which forms part of your fund investment. Investors can select what assets they wish to invest in, or a professional fund manager can do this for them, such as Schroders. Examples of types of assets (also known as asset classes) include cash, property, bonds, gilts and shares.

Capital is simply another term for money.

This type of investment strategy takes a lower-risk approach to actively looking for growth opportunities, usually by diversifying across a selection of assets or holding lower risk assets such as bonds and cash.

Dividends are a proportion of a company's profits allocated (or divided) to shareholders. These will usually be paid to shareholders twice a year in the form of cash. Further shares may also be given as an alternative to cash.

This is an investment process with a high consideration given to the impact of environmental, social and governance factors in the selection of assets.

An equity (also known as a share) is an asset where investors can buy a share in a company, commonly one that is listed on the stock market. If the business grows and makes a profit the value of its shares may rise. Equally, if a business performs poorly the value of their equities may fall.

A public limited company (PLC) will offer its shares on the stock markets, normally the stock market of the country where the PLC is based. A limited company (Ltd) will also issue shares, but these will be few in number and usually owned by the Directors or organisation running the company.

The Financial Times Stock Exchange (FTSE) 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalisation. The London Stock Exchange is a facility where securities – such as shares and bonds – are bought and sold.

So, if your fund follows the FTSE 100, this means that it spreads its investments across those top 100 performing companies, such as British Telecom (BT) and Coca Cola. The next 250 companies are included in the FTSE 250 and the FTSE 350 includes the companies in both.

A growth fund has capital appreciation as its primary goal, rather than income from dividends. It usually consists of companies with above-average growth that reinvest their earnings into expansion, acquisitions, and/or research and development (R&D).

An income fund is one with a greater focus on generating income as opposed to capital appreciation. It may, for example, hold shares of companies paying higher levels of dividends, or bonds that provide regular payments of interest.

This is where a fund manager, such as Schroders, will choose and make investment decisions for you 24/7 by analysing global economies and financial markets before selecting the appropriate investments for your fund. An example of this is the Foresters Stakeholder (Schroders) Managed Funds which are actively managed by Schroders.

Every fund has a risk rating level, which is included in the fund’s factsheet or Key Information Document. The risk rating acts as a guide to your fund’s risk level compared to other investment funds. It shows how likely it is that you might lose money from this fund when there is volatility in financial markets. For example, if your fund has a risk score of 1, this means there is very low risk, meaning you are also less likely to see a substantial rise in growth for the money you invest. A fund with a risk level of 7 (very high risk), means you have the potential for much higher, but more volatile, returns.

Stocks and shares are bought and sold on stock markets, which give companies a place where they can sell a share of their business to raise capital (money). When your Plan invests in stocks and shares, it means that your money is invested in companies listed on stock exchanges.

Tracker funds aim to follow the performance of a particular market index. For example, if your fund aims to track the UK FTSE 100 index, the performance of the fund aims to track the performance (after the deduction of fees and other charges) of the top 100 companies listed on the London Stock Exchange. An example of a tracker fund is the Aberdeen UK All Share Tracker Fund, which aims to track the FTSE ALL Share index of UK companies.