Anyone who deals with investments will inevitably come across a variety of technical terms that can often seem complicated. Whether you are just starting to get to grips with investing or already have some experience, a sound understanding of the most important terms is the key to making successful decisions.
Important Terms in George Invest
Last Article Update 11.04.2025
This glossary provides you with an overview of key terms and concepts from the world of investment. From custody accounts and returns to diversification and ETFs - we explain what is behind the individual terms in an easy-to-understand way. You can then use this knowledge for your personal investment strategy.
Immerse yourself in the world of investments and expand your knowledge - because the better informed you are, the better you can achieve your financial goals.
Administrative and regulatory requirements
Capital gains tax (KESt)
Capital gains tax (KESt) is a withholding tax of currently 27.5% on domestic and domestically sourced foreign investment income. Capital gains tax is paid on interest, bond coupons and dividends.
ISIN
The International Securities Identification Number (ISIN) is a twelve-digit combination of letters and numbers. It allows the unique identification of a security traded on the stock exchange on an international level.
Investment accounts and services
Assets under Management (AUM)
Assets under management (AUM) is the total market value of all investments that a financial institution, e.g. an investment company or asset management company, manages for its investors. AUM are an important indicator of the size and success of an investment company. It includes all funds that are managed for investors in various forms of investment such as shares, bonds and property.
Order
Order to buy or sell securities.
Performance
Performance measures the development in value of an investment or a securities account. In the case of investment funds, this usually represents the percentage change in the net asset value (NAV).
In Austria, the calculation method of Österreichische Kontrollbank (OeKB) is commonly used. According to this method, the performance is the change in the unit price in a period.
The basis of the calculation is the so-called "calculated value" of a fund announced by the investment company, taking distributions into account. Taxes and costs that are not already included in the calculated value are not taken into account.
Portfolio
A portfolio is an account that is used to store and manage your securities such as shares, bonds or funds. It allows you to buy, sell and keep track of your investments.
Transaction fees
The transaction fee refers to the charges incurred when buying or selling securities.
Investment Products
Bonds
Bonds are financial instruments that work like loans you give to companies or governments. When you buy a bond, you lend money for a specific period. In return, they promise to repay the principal amount at the end of the term, along with regular interest payments. This gives you the opportunity to earn a steady income from your investment.
Certificates
Certificates are special financial instruments that differ from shares in that they do not represent direct ownership of a company or institution. Instead, they are based on other assets such as shares, commodities or currencies and derive their value from these. They give investors access to different markets with the possibility of leverage - meaning they can control larger positions with less capital investment. This opens up opportunities, but is also associated with increased risk, as even small market movements can have a significant impact on value.
ETFs
Exchange-traded funds (ETFs) are investment funds that hold a collection of assets, such as shares or bonds, and are traded on exchanges, similar to individual shares. Most ETFs are passively managed, meaning they aim to replicate the performance of a specific index, such as the S&P 500.
Funds
An investment fund is a collection of different investments, such as shares or bonds, which are purchased as a package. The capital of many investors is pooled in order to invest it according to a specific investment strategy. Professional fund managers make investment decisions based on market analyses and forecasts. The advantage of funds lies in the diversification of risk.
Futures
Futures are exchange-traded forward transactions. In a forward transaction, two parties agree to buy or sell a commodity, with delivery taking place at a future date. The price is fixed at the time of the forward transaction. Futures contracts have standardised conditions and are traded on futures exchanges.
Shares
Shares are shares in a company that you can buy. When you buy a share, you own a small part of that company. If the company performs well, the value of your share will increase and you may receive a share of the company's profits. However, if the company does not perform well, the value of your share may fall.
Small-amount investments
With small amount investments, you can buy part of a share, fund, exchange-traded fund or bond rather than the whole thing, which makes investing easier. This means you can invest in different assets without buying a whole share. However, buyers of fractional shares do not have all the rights that a buyer of a whole share has, such as voting or subscription rights, which are set out in the account agreement.
Investment strategies
Flexible-to-sell investments
Flexible-to-sell investments are assets you can easily sell without being tied to a specific duration. Whether it's shares, funds, ETFs, or bonds, you have the freedom to adapt your investment strategy according to your financial goals and market conditions. This flexibility helps you manage your finances more effectively.
Capital-guaranteed investments
Capital-guaranteed investments ensure that you do not lose the guaranteed amount of your original investment. It's like having a safety net for your finances. Even if the investment performs badly due to market fluctuations, you should get back the guaranteed amount at maturity date. This type of investment can offer a way to invest your money with reduced risk.
Regular cash payouts
Regular cash dividends are payments that investors receive periodically from their investments, like dividends from shares. These payouts are a share of the profits made by the company. You can either keep this extra income or reinvest it to potentially grow your investment further.
Risk diversification
Risk diversification is a basic principle of investment funds. By deliberately spreading investments across different securities, issuers, markets, currencies, maturities, etc., the risk is spread. Ideally, losses on one security can be offset by simultaneous gains on other securities.
Sustainable investments (ESG)
The term ESG is made up of the English terms "environmental", "social" and "corporate governance" and represents the three basic principles for sustainable investments. Sustainable investments (ESG) focus on companies that meet certain environmental, social, and governance criteria. These investments aim to support businesses that are good for the planet and society. With ESG you can align your investments with your values to make a step towards positive impact on the world while potentially earning long-term financial returns.
Recurring investments
With recurring investments, you invest money regularly, e.g. through monthly contributions to a savings account or an investment fund. These regular, automated investments, which are made at fixed intervals, make saving easier and allow you to benefit from market fluctuations.
Order types
Limit order
With a limit order, you define the maximum buying rate or the minimum sell rate for your trading order.
Limit order buy
With this order type, you buy a share at a specific price or lower. When you place a limit order, you specify the maximum price you are willing to pay for a piece. Your order will only be executed if the market price is below this limit. Limit orders are a good tool to avoid overpaying due to market price fluctuations.
Limit order sell
With this order type, you sell a share at a specific price or higher. When you place a limit order, you specify the minimum price you are willing to sell a piece for. Your order will only be executed if the market price exceeds this limit. Limit orders are a useful tool to avoid selling too low due to market price fluctuations.
Market order
A market order is an order without a defined limit for its execution. The actual execution quotation depends on the market development and may deviate significantly from the last available quotation at the time of your order creation. Under circumstances, this could lead to an overdraft of your settlement account.
Market order buy
With this order type, you buy a share at the current market price, which can change at any second. In contrast to limit orders, market orders are usually executed immediately but do not offer any control over the price. This can be risky in volatile markets where prices can fluctuate rapidly. In the worst case, you might pay more than the total you were initially shown.
Market order sell
With this order type, you sell a share at the current market price, which can change at any second. In contrast to limit orders, market orders are usually executed immediately but offer no control over the price. This can be risky in volatile markets where prices can fluctuate rapidly. In the worst case, you might receive less than the total you were initially shown.
Stop market order
Only if and when the stop limit has been reached, your order becomes an active "Market" order, i.e., without limitation of the buying/selling rate.
Stop market order buy
This order type is often used when investors believe an asset’s price will rise and want to participate in this upward trend by buying above a certain price. When the market price exceeds this value, a limit order is executed. Additionally, you have more control by setting the maximum price you are willing to pay for a piece.
Stop market order sell
This order type is often used when investors believe an asset’s price will fall and want to minimise their losses by selling below a certain price. When the market price falls below this value, a market order will be executed. However, in rapidly falling markets, this could mean receiving less than the total you were initially shown.
Financial metrics
Price/earnings ratio (KGV)
The price/earnings ratio expresses the relationship between the share price and the company's earnings per share. If the P/E ratio is low, the share is considered favourable; if it is high, it is considered expensive. However, various reasons (share price decline, poor prospects for the company or the sector) can be responsible for a low P/E ratio. The P/E ratio is calculated using the following formula: P/E ratio = share price / earnings per share.
Market capitalisation
Market capitalisation, or market cap, measures a company's size in the stock market. It is calculated by multiplying the current share price by the total number of shares outstanding. Market capitalisation is used to determine the size of a company and helps investors to assess the total market value.
Yield
The yield or retrurn on investment is a measure of the financial success of an investment. It indicates how much profit (or loss) an investment has realised in relation to the original amount invested over a certain period of time. The return is usually expressed as a percentage and helps investors to compare the performance of different investments.
The yield also helps investors to evaluate the success of an investment and make informed decisions. As a rule, higher returns are associated with higher risk. When evaluating returns, it is important to consider one's risk tolerance and financial goals.
Security terms
Maturity date
The maturity date for investments is the date on which you get your money back, plus any interest, e.g. for bonds or certificates of deposit (CDs). It is the finish line, so to speak, for your investment. Longer maturities can mean higher returns but also higher risk, while shorter maturities might be less risky but may offer less. It's also important to consider the issuer's credit risk, i.e. the risk that the issuer will default on its payments and fail to meet its obligations.
Security
A security is a financial instrument that represents a specific asset or a right (e.g. to ownership or repayment). These include shares, bonds and fund units. You can buy, sell or trade securities on stock exchanges in order to realise profits or invest your capital.
Author: Tamara Berger-Feichter