Glossary - U
Underlying / underlying asset
The asset on which the covered warrant, futures contract or option is based and derives its value. The underlying may be a security, a market index (e.g. FTSE 100), a commodity or a currency. Some warrants are based on a basket of underlying assets, which gives an investor exposure to the performance of more than one security.
Undertaking for Collective Investment in Transferable Securities (UCITS)
A type of collective investment or fund that allows financial institutions to operate freely throughout the European Union on the basis of a single authorisation from one member state.
Investors purchase units in unit trusts in a similar way to buying shares in companies. The price of a unit is linked directly to the value of the fund's underlying holdings, known as the net asset value (NAV).
Open ended investment funds where your money is invested with thousands of other investors’ funds, so that you can invest in a greater variety of stock. Each investor owns a unit (or a number of them), the value of which depends on the value of the assets owned by the trust.
Shares in some companies, most often smaller ones, which are not listed. This may be because they do not want to be listed, they prefer to run their business privately, or because they are too small to be listed.