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Early-redemption penalty

This is a financial penalty payable on certain types of loans (such as discount and fixed interest rate mortgages) if you switch deals or pay them off before the end of the pre-arranged period.

Earnings per share (EPS)

The EPS is calculated by dividing the earnings (pre-tax profits) by the number of shares in issue.

Emerging markets

The stock markets based in developing countries such as Asia and South America. They offer investors the potential for high returns, but at a greater risk. There are many funds which specialise in these markets.

Endowment policy

This is a policy which combines investment with insurance and runs for a specific period. It builds up a cash value - generally on either a with-profit or unit-linked basis - and is paid out at the end of the policy term or when you die (whichever happens first).


Equity is the value of your ownership: So, if your house is worth £250,000 and your mortgage is £150,000, you may have £100,000 of equity in your home.


Another name for shares in a company.

Equity release

This is a way to free up the equity in your home without having to sell it. It’s usually only available to elderly people.


For inheritance tax purposes, all your belongings, properties, investments and cash make up your estate.

Ethical investments

Investments in companies that make a positive contribution to the world, and/or that are kind to the environment.

Exchange rate

The price at which one currency can be converted to another.

Exchange traded funds (ETFs)

These are basically tracker funds which are structured like companies and trade their shares on the market. You can get ETFs tracking all sorts of indices and commodities, from major stock markets to the price of pork bellies.


A share sold without the right to the next declared dividend payment.

Execution only

A type of share-dealing or investment service in which the customer makes his or her own investment decision, and the stockbroker or adviser just carries out the transaction.

Exit charge

A payment that someone selling an investment may have to make.

Extraordinary general meeting (EGM)

A meeting called either by the board of directors or the shareholders of a company, to discuss special business.

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