Glossary


IFA	See Investment Fund Act.
IFO	See Investment Fund Ordinance.
IFO-FBC	See Ordinance of the Federal Banking Commission on Investment Funds.
Income	Interest and dividends.
Income property	Property which is built or bought not for the owner’s use but as a capital investment.
Index	Indicator of performance on one or more markets. The oldest and best-known stock market index is the Dow Jones. Indexes make it possible to compare the performance of a fund which is invested in a specific market with the development of this market. See also benchmark.
Index fund	An investment fund which replicates a chosen stock market index in its stock selection and weightings as exactly as possible.
In-house funds	Assets managed separately by the bank, for which no public advertising may be carried out.
Innovator	The majority of innovators are small, new companies whose products offer proven environmental benefits and high resource efficiency. Examples include suppliers of organic food and energy producers which use renewable energy sources such as wind and solar power.
Interest withholding tax (Zinsabschlagssteuer)	Since interest withholding tax was introduced on 1 January 1993, the custodian banks in Germany are generally obliged to deduct 30 percent of the interest revenue contained in the distribution (dividends are subject to capital gains tax), to retain this as a pre-tax deduction and to forward it to the Finance Department. Interest withholding is a type of collection tax which may be partly or wholly reclaimed by taxpayers by declaring it in their income tax assessments. For taxpayers acting as custodians of their own securities (in particular this affects investors who acquired their fund units on an over-the-counter basis), the deduction on the paid-out revenue is 35%. An exception here are reinvestment funds, which are subject to 30% interest withholding tax in all cases (for securities held by a custodian or by the owner of the securities).
Interim profit taxation (Zwischengewinnbesteuerung)	German finance authorities observed that many investors regularly sold their fund units prior to the year-end of the fund, in order to avoid taxation of earnings (considered a tax-free capital gain). German lawmakers therefore introduced the so-called interim gains tax on 1 January 1994. With each sale or redemption of units of foreign funds, the interest accrued until that date is taxed (does not apply to dividends). The sale or redemption of units before the end of the fund’s financial year thus no longer allows investors to make tax-free gains.
Intrinsic value	See net asset value.
Investment currency	Currency in which an investment fund makes its investments. Not to be confused with reference currency or currency of account.
Investment Fund Act	In Switzerland, relationships between investors, the fund management company and the custodian bank are governed by the Investment Fund Act (IFA) and the related ordinances from the Federal Council and the Swiss supervisory authority (Federal Banking Commission, FBC). In Luxembourg and in Germany, investors are protected by the law regarding undertakings for collective investments. The Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg and the Federal Banking Supervisory Office (BaKred) in Germany are the supervisory authorities in these countries analogous to the Swiss Federal Banking Commission.
Investment Fund Ordinance	Investment Fund Ordinance (IFO) issued by the Federal Council on 19 October 1994, which contains detailed provisions regarding the Investment Fund Act.
Investment funds	Investment funds are assets solicited through public advertising, pooled by a great number of independent investors for the purpose of collective investment and managed by the fund management for the account of investors and in accordance with the principles of risk diversification.
Investment horizon	The period of time for which investors want to commit a part of their assets.
Investment instruments	The various investment categories such as equities, bonds and money market instruments.
Investment policy	The investment policy describes the approach taken to achieve the investment objective (stock selection, timing, cash holdings, etc.).
Investment principles	The investment principles characterise and define the fund. The investor receives information about the securities held in the portfolio, the investment currency, the geographic mix of the investments and the risk diversification of the investment fund.
Investor	Holder of fund units. By purchasing units, the investor acquires the right to participate proportionately in the assets and earnings of the fund.
ISIN number	International Securities Identification Number. Internationally recognised securities number. Equivalent in Switzerland to a securities number.
Issue	Issue of new securities.
Issue price	Price at which investors can subscribe fund units. It corresponds to the net asset value per unit plus the issuing commission.
Issuer	Legal entity or public entity which issues securities in order to raise borrowed capital.
Issuing commission	The commission charged by the distribution unit to the investor upon subscription of units.

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