accumulation unit
(UK).A unit trust unit that automatically reinvests dividends from the underlying portfolio rather than paying these out as income to the holder.
authorized futures and options fund
(AFOF) (UK).Investment and unit trusts regulated by the Securities and Investments Board and allowed to market to the public in the UK. Such funds may either invest in futures ...
back-end load
The final charge made by an investment trust or unit trust when an investor sells shares in the fund. Compare front-end load.
balanced mutual fund
A low-risk unit trust in which the investment strategy is to balance growth and income. This is achieved by purchasing a mix of ordinary shares, preference shares, and bonds.
box management
(UK).Term for the powers given to managers of unit trusts to hold units in the trust themselves (cf. mutual fund; undertaking for collective investments in transferable securities). Normally new ...
building society
Traditionally, a financial institution that accepts deposits, upon which it pays interest, and makes loans for house purchase or house improvement secured by mortgages. They developed from the ...
buying price
(UK).The price at which an investor can acquire units in a unit trust. Also called the offer price.
cancellation price
The lowest price at which the manager of a unit trust may offer to redeem units on a particular day. The cancellation price is calculated on the basis of a formula laid down by the Securities and ...
closed-end fund
A fund set up by an investment trust that issues a fixed number of shares to its investors. Compare open-end trust.
creation price
The cost to the managers of a unit trust of creating the units, i.e. the underlying cost of the securities plus the accrued income.
dual pricing
1 Securities which have two prices depending on the market in which they are offered. Such issues violate the law of one price and the differential is a reflection of market impediments or ...
exempt unit trust
A unit trust in which only institutional investors who are not subject to taxation are allowed to invest, i.e. it is restricted to charities and pension funds.
exit charge
The charge to inheritance tax made when an asset is taken out of a discretionary trust. The inheritance tax liability is calculated by taking the rate of inheritance tax charged at the most recent ...
forward pricing
(UK).Transactions in the units of unit trusts based on the prices to be set on the next valuation (cf. historic pricing).
front-end fee
1 A charge levied by a lender when a loan is set up or when the first payment of the loan is taken. It may be a commitment fee, an establishment fee, or a documentation fee.2 Any payment made at the ...
fund of funds
(UK).Unit trust which has a portfolio made up of units in other unit trusts. Such an arrangement provides for the maximum possible diversification of the portfolio.
futures and options fund
(FOF) (UK).A type of unit trust which uses futures and options to generate returns. It is one of two such types of fund authorized by the Securities and Investments ...
geared equity capital unit
(GECU)A unit trust that provides a geared return on equity by investing in options.
