Apt adjectives or adjectival nouns are key to describing and helping investors grasp the subtleties of financial products and their documentation, some of which can be taxing to read, let alone understand.
When describing the terms used to name or label funds, Brooke Masters and Stefania Palma, in two stories — “SEC to crack down on misleading US fund names despite industry backlash”, Report, September 21 and Report, September 20 — use the words “concrete” and “tangible” to describe terms such as “bond”, “equity” and “Europe” in fund names.
Use of the word “concrete” has become rather à la mode, creeping into English regulation to qualify policy instruments, outcomes and proposals in the EU and the US.
This curiosity arguably derives from the French adjective concret: “of thick consistence, implying palpability, or indeed tangibility, or perhaps practicality”. For presumably the object of draft legislation, once applicable, is that it will indeed be practical. Mostly, however, “concrete” would have little reference to the product obtained by mixing cement, sand and water: le béton, as the French call concrete. Hence, “tangible” would seem the more apt usage in both FT articles — as far as modern-day bonds or equities can be so qualified.
As for “concrete”, policy experts, lawyers and consultants should nevertheless be wary of loosely coining the word, especially during work on the EU’s Sustainable Finance Disclosure Regulation.
When it comes to investment, the overall object of appropriate names or labels for funds is to ensure that those names and their underlying documentation use consistent vocabulary, and in doing so prevent investors being misled — and of course prevent le greenwashing.
Philip Morris
Saint-Cloud, France
