Glossary


Eco-innovator	A company whose products and services help to achieve a specific benefit with the greatest possible resource efficiency. Examples: a supplier of organic food or regenerative energies such as wind and solar power.
Eco-leader	Leading company with the best record of environmental achievement in its industry. Using a detailed analytical process, UBS identifies the leaders in each sector of the economy.
Efficient frontier	Modern financial theory sees the relationship between return and risk as two-dimensional, taking returns and volatility into consideration. The portfolio return corresponds to the weighted average of the returns from each of the individual securities. The volatility of the portfolio is not however calculated as a weighted average of the individual securities' volatility, as the valuations of the individual securities do not correlate perfectly. Through diversification, the investor can thus reduce risk without having to forego returns. Due to the close correlation of alternative and traditional investments, an existing portfolio is able to achieve a more favourable risk/return profile by adding alternative investments.
Emerging economies bonds	Bonds from Latin America, Eastern Europe and Asia that offer high potential yields but entail a higher risk exposure due to the political or economic uncertainty in these countries.
Emerging markets	Emerging markets or developing markets – mainly in Asia, Eastern Europe and Latin America – that are growing quickly, but whose economies and stock markets have not yet reached Western standards.
Emerging markets fund	An investment fund which invests in emerging markets, such as Asia or Latin America. See also emerging markets.
Encumbrance	The expenditure of a property for interest on investment capital, duties, real estate operating costs, insurance premiums, maintenance and repair costs, building amortisation/depreciation, risk of rental losses and administrative costs. Various properties may differ sharply from each other in terms of encumbrance, among other reasons due to the age structure and the related maintenance and repair costs, the type of building (residential or office building) and the tax burden on the location of the property.
Environmental efficiency	The key indicators for environmental efficiency are energy and resource consumption. Environmentally efficient management brings environmental benefits and, thanks to the savings it achieves, economic benefits.
Environmental funds	Investment funds that employ environmental criteria in their decisions.
Equities	Securities which evidence an equity interest in a company. As a joint owner, the shareholder has rights of participation (voting right, right to information) and rights to assets (right to a share of profits, subscription rights).
Equity funds	Investment funds which invest their assets primarily in equities. The main categories are country and regional funds, emerging market funds, small and mid cap funds, sector and theme funds, index funds.
Equity Hedged	Equity-based strategies with long and short positions (the weighting distribution between long and short positions can vary significantly from strategy to strategy). Hedging by means of short selling, options and futures.
Eurobonds	Bonds issued on the Euromarket which are exempt from withholding tax. Eurobond trading is centered in London for tax reasons. See also foreign bonds.
Euromarket	Term used to refer to money markets and capital markets where currencies and securities are traded outside their respective country of origin.
Event-driven	Event-driven strategies make rapid - and most importantly profitable - use of information on announced events. With this strategy, it is assumed that the markets will rate the information too optimistically or pessimistically. The key success factors in event-driven strategies are in-depth knowledge and experience in the valuation of securities and access to the latest information.
Exchange-rate risk	Risk of price fluctuations between the currency of account and the investor’s reference currency.
External costs	Costs which are not incorporated in the market price are described as external costs since they are not borne by the responsible party, and include costs related to deforestation, damage to health, structural and material damage, climate change etc.

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