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Understanding financial Jargon U - Z

 

Understanding the lingo can be overwhelming, here are some basic terminologies to help you get an edge on your friends, family and colleagues.

 

Underwriter
A firm which buys an issue of securities from a company and resells it to investors.

 

Unit Price
The unit price is a measurement that reflects the value of a Fund at a point in time. Prices are either allocation or issue (buy in at) or release or redemption (sell at). The total investment of a unit holder can be measured by the number of units held multiplied by the unit price.

 

Under/outperformance
The measure of performance against an index, competitor or any other benchmark.

 

Under/overweight
Underweight is less than the benchmark holding in an asset class; overweight is greater than the benchmark holding.

 

 

Volatility
Volatility is a measure of the variability of returns and is the standard deviation of investment returns over a specific period of time. The higher the standard deviation, the higher the level of risk associated with that investment.

 

Venture Capital
A term used interchangeably with private equity.

 

Weighting
Percentage or proportion of the portfolio invested in each asset class.

 

Withholding Tax
Tax levied on dividends paid abroad.

  

Yield
A measure of return on an investment expressed as a percentage (calculated by dividing the income from an asset by its current capital value).

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