Glossary of Terms



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Imputed Credits (or Imputation Credits)

Companies are required to pay tax on their profits – currently at the rate of a flat 30% in Australia. When companies pay shareholders a dividend, that dividend is often paid from after-tax monies. In order to avoid double-taxation, a dividend imputation system was introduced that ensures investors who receive dividends are only taxed on the difference between the 30% already paid and their own marginal tax rate. When you claim for the tax already paid on dividends prior to them being received, that claim is termed a claim for ”imputed credits” or ”franking credits”. Since superannuation funds are generally taxed at less than 30%, the ”imputed credits” on dividends accrue to reduce your Fund’s overall tax obligation, or result in a tax refund. (See also Franked income)

Inactive Member

A fund member who has not received any employer contributions to his or her account for an extended period of time.

Income Assets

Assets that generate a large part of their returns from regular income and have limited potential for capital gains (for example, fixed interest and cash).

Income Protection Insurance

Insurance cover intended to deliver a regular income if you become ill or temporarily disabled and can’t work for a period of time.

Income Test

A Centrelink-administered means test that determines your eligibility for the Government Age Pension and other social security payments by examining your income.


A measure of the change in value of a market or sectors of a market. For example, the ASX/S&P Accumulation Index measures the change in the overall value of shares listed on the Australian Stock Exchange. All stock exchanges have indices to measure the price of listed companies.

Index Fund

A fund that aims to closely follow the investment performance of a selected market index.

Indexed capital gains

The term ”indexed capital gains” refers to the amount of capital gain achieved on an asset sale after application of an indexation factor. Although assets may be disposed of for a high price than they were acquired, the apparent gain may not accurately represent actual gain because the average cost of goods and services has risen during the period. Applying an indexation factor adjusts the taxable capital gain to more accurately reflect real profit.

Indirect Cost Ratio

The cost to manage your investments, expressed as a percentage of assets. The cost may include investment management, custodian and asset consultant fees. Fees paid to investment managers may also include performance fees when their investment returns exceed agreed performance benchmarks. Fees are calculated looking back as at 30 June each year (using the average value of all the assets in the investment option over the year to 30 June).

Industrials (or Industrial shares)

Shares of companies that produce or sell goods or services, as distinct from resource or mining companies. Industrials make up about two-thirds of the Australian share market.

Industry Super Funds

Originally catered to workers from a particular employment sector, most Industry Super Funds are now open to the public. These funds usually have lower fees and are run only to benefit members, not shareholders.


The increase in the prices of goods and services in the economy, usually measured by examining the cost of a basket of goods and services as defined in the Consumer Price Index.


Facilities such as airports, roads and power stations.

Initial Public Offering

The first time a company offers shares to the public.

Insider Trading

Illegally trading in stocks on the basis of ‘inside’ or secret information not available to the general public.

Insurance Premiums

An amount paid to purchase insurance against death, disablement or loss of income ―often deducted from a member’s superannuation account.


Someone you live with or have a close personal relationship with, financially or domestically support, or who provides you with financial assistance, domestic support or care. You also have an interdependent relationship if you have a close personal relationship and are unable to meet the other three requirements because one or both of you suffer from a physical, intellectual or psychiatric disability or because one or both of you were temporarily living apart.

Interim Balance

A calculated balance in a member account, obtained by creating an Interim period in Mclowd’s Financial Periods screen and performing end of period functions to allocate income and tax obligations and confirm the balance in a Member account as at a date other than the end of financial year.

Interim Period

A period representing part of a financial year, usually set up for the purpose of calculating accurate member balances prior to transferring funds in a member account to another account. For example, before establishing a pension or transition to retirement account for a retiring member or a member transitioning to part time or casual employment, Trustees may need to establish an interim period – from July 1 to the day before the new pension account is to begin – and perform end of period processes to arrive at an Interim Balance for that Member. Part or all of that balance can then be transferred to a different type of member account.

Intraday Suspension

Suspension of trading that lasts for less than a business day.

Investment Distribution

See Asset Allocation

Investment Manager

A person or business engaged on a continuing basis over a period to manage your investment portfolio and advise on buying and selling.

Investment Style

A term that describes an investor’s approach to risk, income generation, growth, etc.

Investment Term

The length of time you have to invest.

Investment Vehicle

An asset in which you invest aiming to achieve a financial return. This may be stocks, bonds, mutual funds, options, futures or a property trust.


about the author:

Lorraine Cobcroft

With a background in accounting and financial management, followed by two decades writing software documentation, Lorraine joined the Mclowd team in mid-2016 and is enjoying working with a dynamic team to enhance an innovative product that has the potential to revolutionize the way Australians manage their retirement funding. Lorraine is also an accomplished business writer, ghost-writer, novelist and short-story writer and poet.

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