Glossary

Unbundled
Referring to the structuring of a product or service where the individual components involved in the management of that product are split out with separate fees usually applying. For example, an unbundled superannuation arrangement might involve separation of investment management, trusteeship and insurance arrangements among different parties. (Opposite of Bundled).

Uncalled Capital
That part of the company's issued capital which has not been paid for by the shareholders. (See also Authorised Capital and Issued Capital).

Undeducted Contribution
A component of an eligible termination payment comprising superannuation contributions (usually by employees) after 30 June 1983 for which no tax deduction was claimed.

Underlying
Referring to the stock, commodity futures contract, or cash index to be delivered in the event an option is exercised. The term underlying is often used as a noun in its own right, as well as an adjective.

Underlying Inflation
A calculated measure that takes the headline inflation rate and excludes certain volatile items or series that are affected by factors other than general economic conditions (eg. government taxes, or the effect of weather on fruit and vegetable prices). The resulting rate is based on only those items directly related to the economy.

Underlying Security
The shares, stock or commodity upon which a synthetic security is based. Also called Physical Security.

Underperformance
Achievement of a lower investment return than a benchmark or other measure (eg. competitor portfolios) against which that return is being compared. (Opposite of Outperformance).

Undervalued
Referring to a security or currency which trades below what is perceived to be its proper market value, taking account of statistical or fundamental research or other relevant information.

Underweight
Having a lesser exposure to a particular sector in an investment portfolio, compared with a neutral or benchmark position. (Opposite of Overweight).

Underwriter
A broker or bank which arranges the sale of an issue of securities on behalf of a client and, if it does not sell all stock to other institutions or investors, itself undertakes to purchase the unsold securities. By using an underwriter, the client is therefore assured of raising the full amount of money it is seeking.

Unfranked Dividends
Share dividends paid by companies which are not subject to Australian tax (or paid by Australian companies, but before the introduction of dividend imputation in 1986). Recipients of unfranked dividends are subject to tax at their normal marginal rate.

Unfunded
In relation to superannuation, describing a scheme in which the accrued benefits payable to members (ie. the liabilities of the fund) are not matched by the fund's current assets. Some Government superannuation funds have unfunded liabilities. (See also Fully Funded).

Unfunded Liabilities
The actuarial calculation of the value of future benefits payable (eg. to members of a defined benefit superannuation fund) less the net assets of the fund at a given balance date.

Unit Trust
A pooled investment fund or collective investment, established under a trust deed, that continually offers new units and stands ready to redeem existing ones from the owners.

Universe
A 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. Fund manager performance surveys are also referred to in this way.

Unlisted
Referring to a company and/or shares that are not available for purchase or sale through the sharemarket.

Unlisted Securities
Securities which are not listed on an organised stock exchange.

Unrealised Profits
Profits which have not yet been received because, while the price of the asset has risen, the owner has not yet sold; ie. paper profits.

Unsecured Creditor
A person or organisation who has lent money to another without taking security over specific assets of the borrower, so that repayment is dependent solely on the borrower's ability and willingness to repay. The lender is legally entitled to repayment but ranks after secured creditors, debenture holders, etc in the event that the borrower is wound up.

Upside Capture
A derivative structure in capital protected portfolios that minimises the potential for losses, whilst taking advantage of upward movements in a market or security price. The extent to which this structure benefits in overall returns when the market rises is called the upside capture. Usually the more robust the floor return, the lower the level of upside capture. (See also Downside Protection).

Up-tick
A small increase in the price of a security compared with the most recent transaction in the same security. (See also Tick).

Utility
A term used to describe the statutory authorities responsible for providing services to the community such as water, gas and electricity.

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