Are you preparing for a Fund Accounting interview and not sure where to start? Rena from our Financial Services recruitment team explains some standard terms you should know before you go in.

All the terms you need to know to impress your potential employer.

Interviews are sometimes stressful and daunting experiences, even for the most senior of Fund Accounting professionals. You want to make sure to highlight all of your excellent experience and education, without boring the interviewer. Don’t be afraid to inform them about what you do as well as what you have accomplished and achieved to date in your career.

As with any profession, there are many terms and acronyms commonly used that are complicated or hard to understand. This is definitely the case when it comes to Fund Accounting. But don’t fret, we have you covered. Below you will find a cheat sheet of all commonly used terms when it comes to Fund Accounting. Memorize these before your interview, and you will sail through with flying colours!

Cheat Sheet

Fund Accounting Interview Cheat sheet

Fund – A fund pools together the money from many investors and then the fund manager uses it to invest in a broad range of assets. Their aim is to grow your money and if required, provide you with a regular income. The fund manager will invest in different asset types such as cash, bonds, equities and property – exactly what the fund manager buys depends on the investment objective of the fund.

Bond – A bond is a debt security, similar to an I.O.U.  Bonds are used by companies, states and sovereign governments to raise money and finance a variety of projects and activities. When you purchase a bond, you are lending money to a government, corporation, or other entity known as an issuer.  In return for that money, the issuer provides you with a bond in which it promises to repay the principal along with interest (coupons) on a specified date (maturity).

Equities – Equities are stocks – shares in a company. If you buy stocks, you’re buying equities.  When an investor buys a share they become a part-owner of that company. This entitles them to a share of any profits (via dividends).

Future – A futures contract is a contract where both parties agree to buy and sell a particular asset of specific quantity and at a predetermined price. For example, the buyer of the futures contract (a long position) agrees on a fixed purchase price to buy the underlying commodity (wheat, gold, beef or oil for example) from the seller at the expiration of the contract. The seller of the futures contract (a short position) agrees to sell the underlying commodity to the buyer at expiration at the fixed sales price. As time passes, the contract’s price changes relative to the fixed price at which the trade was initiated. This creates profits or losses for the trader.

Mark to Market (MTM) – Mark to Market is the process of daily revaluation of a security to reflect its current market value instead of its acquisition price or book value.  Mutual funds are generally marked to market on a daily basis at the market close.

NAV – NAV (Net Asset Value) is typically presented on a per share basis.

Fund Accounting NAV Formula

Fund Accounting NAV Formula




Cap Stock Activity – This refers to the share base of a fund. Closed-end mutual funds have a constant share base. For open-end mutual funds, changes to the share base can occur on a daily basis due to subscriptions and redemptions.

Subscriptions: New buys into a fund. Increases a fund’s shares outstanding and total net assets. Redemptions: A sell of a fund holdings. Decreases a fund’s shares outstanding and total net assets.

Benchmark – A benchmark is a market or sector index against which the performance of a fund can be measured.  As the name suggests, is a point of reference that tells you how a mutual fund has performed vis-a-vis its peers and the market.

Swap – A swap is a derivative contract through which two parties exchange financial instruments.  For example, the exchange of two securities, interest rates, or currencies for the mutual benefit of the exchangers.

Corporate Action – A Corporate Action is an activity initiated by a company that affects the nature and/or quantity of stock that you hold. Corporate actions include both mandatory actions (stock splits, mergers & acquisitions, cash dividends, return of capital) and voluntary actions (tender offers, rights issues, buyback offers). Corporate actions are used to distribute profits to shareholder, influence stock prices, or during mergers/spinoffs to increase company profitability.

We hope this Cheat Sheet helps you prepare for your upcoming Fund Accounting interview. If you would like to view our current Financial Services vacancies please click here. 

If you are looking to source a candidate for a Financial Services role or you’re interested in making a career change yourself, please give Rena a call on 01 4690901 or connect with her on LinkedIn.