UCITS
Undertakings for Collective Investments in Transferable Securities. The UCITS legislation governs how a fund can be marketed within the European Union and is designed to allow cross-border fund sales to investors of different nationalities. To obtain UCITS status a fund must invest within defined but wide parameters.
UK Society of Investment Professionals (UKSIP)
UK member society of the CFA Institute. Formed by a merger between the Institute of Investment Management and Research (IIMR) and the London Society of Investment Professionals (LSIP).
UKIPS
See United Kingdom Investment Performance Standard.
UKSIP
See UK Society of Investment Professionals.
Unauthorised unit trust
Unit trust that is suited to the needs of institutional investors but cannot be marketed to the general public.
Underlying security
Shares (or other securities) on which a derivative instrument is based.
Underperformance
See outperformance.
Undersubscribed
Situation where the demand for a new issue of securities is less than the number of shares issued. This is sometimes referred to as an under-booking.
Undervalued
See overvalued.
Underweight
a.Exposure to a specific asset (or asset class) which is lower than the proportion it represents in the benchmark against which the portfolio is measured. (See also overweight.)
b.Specific rating within a three-part credit rating system which indicates whether a fixed income security should be bought (overweight), sold (underweight) or held (marketweight). (See also overweight, marketweight.)
Underwriting
Guarantee by an investor (usually an investment bank) to a company issuing new shares or bonds that it will buy any remaining shares or bonds that are not bought by other investors. For providing this service, the underwriter will receive a fee but bears the risk that investors will not fully take up the issue and the
underwriter will be left with a large holding of stock.
United Kingdom Investment Performance Standard (UKIPS)
Incorporates GIPS and replaces the Pension Fund Investment Performance Codes (PFIPC). This has been approved by the National Association of Pension Funds (NAPF). (See also GIPS.)
Unit-linked fund
Pooled fund usually operated by an insurance company or investment manager where the value of an investor’s holding in the fund is represented by the number of units held multiplied by the unit price.
Unit price
Value of a pooled fund unit, which may be a bid, offer or mid price. The unit price
is determined by reference to the net asset value of the fund. Units may be “accumulation”, where income distributions are reinvested, or “distribution”/“income”, where income is paid away to unit holders.
Unit trust
Pooled fund that is established under trust law in the UK. Unit trusts may be authorised or unauthorised. Only authorised unit trusts may be advertised for sale to the general public. The unit trust will create and cancel units as investors invest and disinvest — the number of units in existence from time to time will therefore vary and it is not necessary for buyers to be matched with sellers.
Universe
Term sometimes used to describe the total number of operators or competitors in a particular field, or the number of available stocks from which a portfolio is selected. Investment manager performance surveys are also referred to in this way.
Unlisted (stock)
Company that is not available for purchase or sale through the stock market.
Unrealised profit/loss
The expected gain/loss on an investment which remains unrealised until the investment or underlying securities have been cash settled.
Unsecured debt
Debt obligation with no collateral, and backed only by the debtor’s creditworthiness.
Unwind
Reversal of an investment decision. For instance, an investor who has bought a share can unwind the position by selling the share.
Upper quartile
See top quartile.
Underlying Futures Contract
The specific futures contract that is bought or sold by exercising an option.
U. S. Treasury Bill
A short-term U.S. government debt instrument with an original maturity of one year or less. Bills are sold at a discount from par with the interest earned being the difference between the face value received at maturity and the price paid.
U.S. Treasury Bond
Government-debt security with a coupon and original maturity of more than 10 years. Interest is paid semiannually.
U.S. Treasury Note
Government-debt security with a coupon and original maturity of one to 10 years.
