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 Timeline 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.

         
  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  
  IOS Investors Overseas Services The most successful international mutual fund company of its era  
  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 corporate 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  
  QE Quantitative Easing Monetary policy used when short-term interest rates are near zero  
  QFII Qualified Foreign Institutional Investor A fund manager authorised to invest in an otherwise closed market  
REER Real Effective Exchange Rate A means for comparing the trading competitiveness of different countries
  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  
  Snake European Currency Management Scheme Unofficial fore-runner of the Euro 1972-1979  
  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  
  VOL Volatility A measure of monthly changes in price, widely sed to assess risk  
  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 Kilobyte A software date problem at 1/1/2000  
         
  Source: Investors RouteMap