Investment Acronyms
An international lexicon of economic,
investing and political acronyms
We apologise for the loss of detail arising on the use of alphabet soup. This is necessary in the interests of brevity, especially in the Chronology charts, which analyse financial history. For the benefit of those for whom some of the acronyms may be unfamiliar, we set out below a listing in alphabetical order together with explanations in plain English. This does not include the names of individual companies quoted on a stock market.
| Economic, Political and Financial Acronyms | ||||
| Acronym | Translation | Explanation | ||
| ADR | American Depository Receipt | Foreign shares traded in the United States | ||
| AMEX | American Stock Exchange | Traditionally, the junior market to NYSE | ||
| ANC | African National Congress | The anti-apartheid movement in South Africa | ||
| ARMS | Adjustable Rate Mortgage Securities | Mortgages based on short-term interest rates | ||
| BJP | Bharatiya Janta Party | The Hindu political party in India | ||
| BOE | Bank of England | The central bank of the United Kingdom | ||
| BOJ | Bank of Japan | The central bank of Japan | ||
| BOP | Balance of Payments | Trade surplus / deficit on current account | ||
| BRD | Federal Republic of Germany | Formerly West Germany | ||
| BRIC | Brazil, Russia, India + China | The largest emerging markets | ||
| BV | Book Value | Asset value at historic acquisition cost | ||
| CAGR | Compound Annual Growth Rate | Y1 x Y2 x Y3…. Change % | ||
| CAP | Common Agricultural Policy | Food price fixing regime in the European Union | ||
| CAPEX | Capital Expenditure | Investment by the corporate sector | ||
| CBI | Confederation of British Industry | Trade association for large UK companies | ||
| CBOE | Chicago Board of Trade Options Exchange | The leading US exchange for dirivative instruments | ||
| CD | Certificate of Deposit | Large short-term investments at commercial banks | ||
| CD | Christian Democrat | Centre-right political party | ||
| CDO | Collateralized Debt Obligation | Securitised credit instrument | ||
| CDU | Christian Democratic Union | Centre-right political party in Germany | ||
| CEO | Chief Executive Officer | Managing Director | ||
| CFA | Chartered Financial Analyst | Qualified investment analyst in the United States | ||
| CFP | Certified Financial Planner | Qualified investment adviser in the United States | ||
| CFTC | Commodities Futures Trading Commission | US regulator for derivative instruments | ||
| CGT | Capital Gains Tax | Tax on realised profits from securities dealings | ||
| CIS | Commonwealth of Independent States | Former Soviet Union | ||
| CME | Chicago Mercantile Exchange | An exchange for derivative instruments in the United States | ||
| CMO | Collateralized Mortgage Obligation | Securitised mortgage instrument | ||
| CPA | Certified Public Accountant | Qualified accountant in the United States | ||
| CPI | Consumer Price Index | An internationally-agreed measure of adjusting for inflation | ||
| CSO | Diamond Central Selling Organisation | De Beers diamond monopoly | ||
| CSU | Christian Socialist Union | Centre-right political party in Bavaria, Germany | ||
| D2 | Deutschland 2 Netz | Private-sector mobile phone network in Germany | ||
| DAX | Deutsche Aktien Index | Total return index of 30 leading German shares | ||
| DDR | Deutsche Demokratische Republik | Formerly East Germany | ||
| DJII | Dow Jones Industrial Index | Geometric price index of 30 leading US stocks | ||
| DJP | Democratic Justice Party | Political party in South Korea | ||
| DKr | Danish Krona | Independent currency of Denmark | ||
| DM | Deutsche Mark | West German currency 1948-1998 | ||
| EBITDA | Earnings before Interest, Depreciation & Amortisation | Valuation methodology for assessing operating profits | ||
| ECB | European Central Bank | The central bank of the Euro-Zone | ||
| ECU | European Currency Unit | Unofficial fore-runner of the Euro 1979-1998 | ||
| EEC | European Economic Community | Free trade association of continental European countries | ||
| EFTA | European Free Trade Association | Free trade association of peripheral European countries | ||
| EMU | European Monetary Union | Countries that have adopted the Euro | ||
| EPS | Earnings per Share (See Financial Glossary) | The most popular yardstick for valuing stocks and shares | ||
| ERISA | Employee Retirement Income Security Act | Personal pension plan in the United States | ||
| ERM | Exchange Rate Mechanism | Unofficial fore-runner of the Euro 1979-1998 | ||
| ETF | Exchange Traded Fund | Stock exchange listed open-ended fund | ||
| EU | European Union | European free-trade area of which the Euro-Zone is a part | ||
| EURIBOR | Euro Interbank Offered Rate | Overnight lending rate between banks in Euro | ||
| FASB | Financial Accounting Standards Board | United States agreement on common accounting standards | ||
| FAZ | Frankfurter Allgemeine Zeitung index | Broad-based German stock market price index | ||
| FDA | Food & Drug Administration | US ministry responsible for approving drugs | ||
| FDI | Foreign Direct Investment | Corporate, as opposed to portfolio investment from abroad | ||
| FDIC | Federal Deposit Insurance Corporation | Government backed insurance for bank accounts in the US | ||
| FDP | Free Democratic Party | The Liberal political party in Germany | ||
| Fed. | Federal Reserve Bank | The central bank of the United States | ||
| FF | French Franc | French Currency 1946-1998 | ||
| FIBV | Federation Internationale des Bourses de Valuers | Union of world stock exchanges | ||
| FOMC | Federal Reserve's Open Market Committee | Central bank of the United States | ||
| FSA | Financial Services Authority | UK financial regulator since 2000 | ||
| FT | Financial Times | The leading British financial journal | ||
| FTSE | Financial Times Stock Exchange Indices | A family of international stock exchange indices | ||
| G7 | Group of Seven | The association of the world's leading economies | ||
| GAAP | Generally Accepted Accounting Principles | US agreement on common accounting standards | ||
| GATT | General Agreement on Tarriffs and Trade | International treaty to reduce import tariffs | ||
| GBP | Pound Stirling | Independent currency of the United Kingdom | ||
| GDP | Gross Domestic Product | Consumption + Investment + Government + Exports - Imports | ||
| GNP | Gross National Product | GDP + Foreign Income - Foreigners Income | ||
| GST | General Sales Tax | Value Added Tax in the united States | ||
| IAS | International Accounting Standards | European agreement on common accounting standards | ||
| IBAN | Inter Bank Account Number | Unique individual bank account identification number | ||
| IFA | Independent Financial Adviser | Financial adviser not bound to any single product provider | ||
| IFC | International Finance Corporation Indexes | The original family of emerging market indices | ||
| IFO | Institute fuer Wirtschaftsvorschung | A survey of business conditions in Germany | ||
| IG | Industrie Gemeinschaft | Trade union in Germany | ||
| IMF | International Monetary Fund | The central bank of central banks | ||
| IPO | Initial Public Offering | First-round floatation of shares on a stock market | ||
| IRA | Individual Retirement Account | Personal pension plan in the United States | ||
| IRS | Internal Revenue Service (US) | Tax ministry of the United States federal government | ||
| JGB | Japanese Government Bonds | Fixed interest securities issued by the Japanese government | ||
| KOSPI | Korean Composite Stock Price Index | The leading index of South Korean share prices | ||
| LBO | Leveraged Buy-Out | A corportae largey take-over financed by debt | ||
| LDP | Liberal Democratic Party | The governing party in Japan since 1955 | ||
| LIBOR | London Interbank Offered Rate | Overnight lending rate between British banks in £ or US$ | ||
| LIFFE | London International Financial Futures Exchange | The leading British exchange for dirivative instruments | ||
| LME | London Metal Exchange | The world's leading exchange for non-ferrous metals | ||
| LTCM | Long Term Capital Management | The macro hedge fund that collapsed in 1998 | ||
| M&A | Mergers & Acquisitions | Corporate take-overs | ||
| MBA | Master of Busines Administration | A highly-level university degree in business | ||
| Mercosur | South America Free Trade Association | The free trade area of Latin America | ||
| MiFID | EU Markets in Financial Instruments Directive | The law by the European Union that governs financial transactions | ||
| MS DOS | Microsoft Digital Operating System | The operating software for personal computers | ||
| MSCI | Morgan Stanley Capital International Indexes | A family of international stock exchange indices | ||
| NAFTA | North America Free Trade Association | The free trade area of Canada, Mexico and the United States | ||
| NAPM | National Association of Purchasing Managers | A survey of business conditions in the United States | ||
| NASDAQ | National Association of Securities Dealers | The electronic share price suystem for unlisted stocks | ||
| NATO | North Atlantic Treaty Organisation | The alliance of western democratic countries | ||
| NAV | Net Asset Value | (Total Assets - Liabilities) per Share | ||
| NKP | New Korea Party | South Korean political party, otherwise known as DJP | ||
| NoK | Norwegian Krona | Independent currency of Norway | ||
| NYMEX | New York Mercantile Exchange | An exchange for derivative instruments in the United States | ||
| NYSE | New York Stock Exchange | The world's leading stock exchange | ||
| OECD | Organisation for Economic Co-operation and Development | The association of industrialised countries | ||
| OEIC | Open-ended investment company | A unit trust or mutual fund in the United Kingdom | ||
| OPEC | Organisation of Petroleum Exporting Countries | The association of oil producing countries | ||
| OSE | Oslo Stock Exchange | The Norwegian stock exchange | ||
| OTC | Over-the-counter securities | Shares not officially listed on a stock exchange | ||
| P/CF | Price / Cash Flow Ratio | Share Price / (EPS + Depreciation per Share) | ||
| P/E | Price / Earnings Ratio (See Financial Glossary) | Share Price / Eranings per Share | ||
| PASOK | Panhellenic Socialist Movement | The Socialist political party in Greece | ||
| PD | Popular Democrat | Popular Democratic political party | ||
| PHLX | Philadephia Stock Exchange | An increasing rival to NYSE and NASDAQ since 2000 | ||
| PIGS | Portugal, Ireland, Greece + Spain | A group of over-spending Southern European countries | ||
| PIT | Professional Investment Tools Ltd. | The publisher of Investors RouteMap | ||
| PR | Proportional Representation | The alternative to a winner-takes-all voting system | ||
| PRI | Revolutionary Party | The political party that ruled Mexico 1929-2000 | ||
| PSE | Pacific Stock Exchange | The leading market for technology shares | ||
| QFII | Qualified Foreign Institutional Investor | A fund manager authorised to invest in an otherwise closed market | ||
| REIT | Real Estate Investment Trust (US) | A mutual fund for real estate investments | ||
| ROA | Return on Assets | Profits after Tax / Net Assets | ||
| ROCE | Return on Capital Employed | (Operating Revenues - Epenses) / (Total Assets - Current Liabilities) | ||
| ROE | Return on Equity | Net Income / Total Equity or EPS / Net Asset Value or Book Value | ||
| ROI | Return on Investment | Net Profit / Capital Invested | ||
| RR | Registered Representative | An individual authorised to deal in securities in the UK or US | ||
| RTC | Resolution Trust Corporation | The bad bank for the US Savings & Loans industry since 1989 | ||
| S&P | Standard & Poor's 600 Share Index | Broad-based United States stock market price index | ||
| SARS | Severe Acute Respiratory Syndrome | The Asian pandemic in 2003 | ||
| SD | Social Democrat | Centre-Left political party | ||
| SDP | Social Democratic Party | Centre-Left political party in Germany | ||
| SDR | IMF Special Drawing Rights | An international currency only traded between governments | ||
| SE | Stock Exchange | Abbreviation for a stock exchange | ||
| SEC | Securities Exchange Commission | UK financial regulator since 1933 | ||
| SEDOL | London Stock Exchange securities code | A unique identification code for UK securities | ||
| SeK | Swedish Krona | Independent currency of Sweden | ||
| SEO | Senior Executive Officer | Managing Director as defined by UK financial regulator | ||
| SF | Swiss Franc | Independent currency of Switzerland | ||
| SFA | Securities & Futures Authority | UK financial regulator 1986-2000 | ||
| SIPC | Securities Investor Protection Corporation (US) | Government backed insurance for brokerage accounts in the US | ||
| SPDR | S&P Composite Index Exchange Traded Fund | An NYSE-listed ETF representing the S&P Composite index | ||
| SPO | Socialist Partei Oesterreich | The Socialist Party of Austria | ||
| STOXX | Dow Jones Stock Market Indexes (Europe) | A family of Euro and US$ denominated European share indices | ||
| TANKAN | Federation of Industrial Corporations | A survey of business conditions in Japan | ||
| TARP | Troubled Assets Relief Programme | The US banking sector bail-out of 2008 | ||
| TIPS | Treasury Inflation Protected Securities (US) | US government bonds with coupon and principal indexed to CPI | ||
| TMT | Technology, Media & Telecom | The stock market sectors identified with the digital revolution | ||
| TOPIX | Tokyo Stock Price Index | The leading price index of Japanese shares | ||
| TSE | Tokyo Stock Exchange | Japan's leading stock exchange | ||
| TVA | Value Added Tax | Value Added Tax in France | ||
| UCITS | Undertakings for Collective Investment in Transferable Securities | European mutual fund | ||
| UK | United Kingdom | England, Scotland & Wales + Northern Ireland | ||
| UN | United Nations | The global association of all governments, except Taiwan | ||
| US | United States | The federation of 51 states in North America | ||
| USDA | Department of Agriculture | The US ministry responsible for food production | ||
| USSR | Union of Soviet Socialist Republics | Russia 1917-1991, now Commonwealth of Independent States | ||
| VAR | Value at Risk | Assets x Volatility | ||
| VAT | Value Added Tax | Sales Tax in Europe | ||
| VP | Vice President | An honourary corporate title with limited authority | ||
| WACC | Weighted Average Cost of Capital | (Profits + Interest) / (Assets + Debts) | ||
| WSJ | Wall Street Journal | The leading US financial journal | ||
| WTI | West Texas Intermediate | The US benchmark price for crude oil | ||
| WTO | World Trade Organisation | The association of countries agreeing to limit mutual tariffs | ||
| Y2K | Year 2000 Kilo | A software date problem at 1/1/2000 | ||
| Source: Investors RouteMap | ||||