Financial Dictionary.

This is a browseable and searchable reference tool for terminology relating to UK-based personal finance and financial products.

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Bid / Offer Spread

Definition: Until recently, funds generally had two prices - a buying price (Offer Price) and a selling price (Bid Price). The difference between the two values is known as the 'spread', which was usually about 5%, but can be lower of higher. Effectively, this is an additional charge imposed by fund managers, to cover costs such as administration, commission and dealing costs. Therefore, the effects of the spread needs to be overcome by investment growth before the units are truly growing in value. This effect is known as the Reduction in Yield. Recently, insurance funds and OEICs have introduced the concept of a single-priced charging structure, at which there is a single price for the buying and selling of units, with the only charge being an Annual Management Charge (although many OEIC managers levy an initial entry charge upon new investments).

Recent Financial Topics

While the quarterly performance represented a slowdown in sales, the firm noted that trade was impacted by a Bank Holiday weekend happening a week later than last year.

Wetherspoon's profits buoyed by Guinness boom among younger punters
08/05/2024 05:22 AM

Among the companies with reports and trading updates today are Boohoo, JD Wetherspoon, Workspace, Direct Line and Informa.

BUSINESS LIVE: Boohoo sales slump; Wetherspoon's lifts profit expectations; Workspace boss exits
08/05/2024 05:10 AM

Direct Line said its average premium for motor and home insurance stood at £599 for new customers and £515 for renewal customers, against £478 and £373 by the same point a year ago.

Direct Line customers faced higher prices in the first quarter
08/05/2024 04:03 AM

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Recent Financial Topics

Financial Dictionary.