Underlying investment

(redirected from Underlying Investments)

Underlying Investment

The sum of the investments represented in a mutual fund or annuity. When one buys a share in either of these investment vehicles, the share represents a right to the dividends, coupons, and capital gains or losses in each of the securities represented in the fund or annuity in proportion to their representation in it. For example, suppose a mutual fund consists of 50% of Stock A, 25% of Stock B, and 25% of Bond C. All other things being equal, ownership of a share in that mutual fund effectively means that one owns half a share of Stock A and one quarter of a share in Stock B and Bond C. One refers to these investments collectively as the underlying investment. See also: Underlying asset.

Underlying investment.

The investments in a mutual fund, a variable annuity's separate account fund, or other fund makes are considered the fund's underlying investments.

The value of a single share or unit of the fund is based on the combined value of all its underlying investments, minus fees and expenses, divided by the number of outstanding shares or units.

In some cases, when the item underlying a derivative investment is a security, such as the individual stock underlying an equity options contract, it is also called an underlying investment.

However, when the underlying item is a consumable commodity, such as corn, or a financial product, such as an equity index, it is called the underlying product, the underlying instrument, or sometimes simply the underlying.

References in periodicals archive ?
1] The underlying investments of each fund also drive performance for the individual target date funds.
Some of the fund's underlying investments may fall under Annex I or II of Environmental Impact Assessment (EIA) Directive 2011/92/EU (as amended by Directive 2014/52/EU), requiring a full EIA or screening by the national competent authority on the basis of Annex III to determine the need for a full EIA.
GFH Financial Group said it has distributed $53 million to its funds' investors who currently have underlying investments in Bahrain, the UAE, the US and India.
National Futures and Commodities Exchange's enhanced monitoring solutions consist of the following updates: equity portfolio summary investment reports; documentation of trading activity transactions at the company level underlying investments; detailed reports for underlying investment such as exclusive investment exposure to all funds; accurate scaling of performances against wide range of indices; portfolio precise reporting such as diversification by geography, industry, vintage year, or as required; and appraisal processing at the underlying investment phase, accustomed real-time by cash-flows.
Al Khalij Commercial Bank (al khaliji) has announced the launch of three new structured deposits linked to different underlying Investments.
These MFs invest in a range of companies including Monsanto, Rio Tinto, Posco, Exxon Mobil and funds with underlying investments in global commodity stocks.
At the time, investors in these plans did not have the transparency of holdings offered by underlying investments in ETFs.
has introduced a new variable universal life insurance policy that will give consumers the potential for cash value accumulation and can guarantee that their death benefit will not lapse regardless of how the underlying investments perform.
This will largely depend on the maturity profile, forward interest rates, yield and volatility of the underlying investments on which the asset is based, whether these be currencies, bonds, equities, indices or precious metals (and ignoring any foreign exchange considerations).
If the underlying investments rise, owners can lock in a higher guarantee after five years.
Because the underlying investments have a known cost basis and acquisition date, you can plan to minimize realized capital gains.
Nearly all are are traded at less than the value of their underlying investments, but the extent of the gap, or discount, varies widely between trusts and with the ups and downs of the stock market.