Glossary


Factor 4	Demonstrates the benefits of the environmental efficiency principle. Double the prosperity using only half the resources.
Fair trade	Fair trade with farming associations and plantations includes paying prices which cover costs, ensuring guaranteed minimum wages for workers and establishing long-term trading relationships. In return, companies’ production methods comply with stringent guidelines, thus ensuring quality standards remain high. Various organisations such as Max Havelaar define standards and check that criteria are being met.
FCP	See fonds commun de placement.
Federal Banking Commission (FBC)	The supervisory authority and executive body elected by the Federal Council, independent of the Federal Administration and Swiss National Bank, and responsible for the implementation of the Banking Law and the Investment Fund Act. The FBC authorises management companies, custodian banks, representatives and sales agents to commence business activities. The FBC is also responsible for authorising new funds and approves their fund regulations. It monitors compliance with the Investment Fund Act and the fund regulations. In cases of gross misconduct, the FBC can withdraw a management company’s or custodian bank’s licence to conduct business.
Fiduciary responsibility	The duty imposed by law on the management company and custodian bank as well as on their representatives to act solely in the interests of their investors.
Financial year	Period between one year-end closing and the next. A fund’s financial year need not necessarily coincide with the calendar year. Also known as business year.
Fixed-income securities	Together with money market instruments, bonds are referred to as fixed-income securities because they make regular, fixed-interest payments and repay the principal amount in full at maturity.
Flat fee	UBS applies a so-called flat fee to most securities and money market funds. This fee is charged to the fund’s assets and covers all expenses incurred in the management, administration and safekeeping of the fund’s assets as well as costs incurred in the distribution of the fund (printing prospectuses, annual and semi-annual reports, costs for auditing and publication of prices, fees charged by the supervisory authority etc.). The only costs not covered are transaction costs incurred in the administration of the fund’s assets (brokerage fees in line with the market, fees, duties etc. as well as any applicable taxes). UBS’s flat fee is comprehensive and very client-friendly. It cannot be compared with similarly named fees from other fund providers, because these often only cover part of the investor’s effective costs. Also refer to “management fee”. The flat fee is not charged to the investor, but directly to the fund’s assets. As regards all UBS Funds domiciled in Luxembourg, Switzerland or Germany, except UBS Real Estate Funds, “Flat fee“
Floating rate notes	Securities with variable interest rates.
Floor	Lower limit below which the invested capital may not fall on a set date.
Floor funds	See capital preservation funds.
Fonds commun de placement	French term for investment funds established in contract form.
Foreign bonds	Bonds issued by a borrower outside its home country and denominated in the currency of the market where the issue is made. See also Eurobonds.
Forward pricing	Under this system, the fund assets are valued on the basis of the previous day’s closing prices. As opposed to historic pricing.
Fraction	In the investment fund business, a fraction of a fund unit.
Fuel cell technology	A fuel cell generates electricity and heat by combining hydrogen and oxygen within an electromagnetic process. Unlike internal combustion engines, which emit waste gases, the only by-product generated by fuel cells is water.
Fund assets	"Fund assets" (also called "net fund assets") is the term used to denote fund assets based on their market values after deduction of liabilities. With real estate funds, mortgage loans and other debts must be deducted, as must the taxes that have to be paid when properties are liquidated.
Fund domicile	A fund is domiciled in the country in which the fund is established or registered with the local supervisory authority.
Fund management company	The fund management company administers investment funds for the account of the investors. It decides on investments and exercises all rights associated with the investment fund. It may delegate investment decisions and other tasks, but it is liable for actions of its appointed agents as if they were its own actions.
Fund manager	See portfolio manager
Fund of funds	An investment fund which restricts its investments to units of other investment funds. Not to be confused with an umbrella fund.
Fund regulations	See prospectus.
Fund-linked life insurance	In the case of fund-linked life insurance, the portion of insurance contributions which are normally invested in the unearned premium reserve (savings portion) is used to acquire fund units. There are life insurance policies which allow the policyholder to choose from a range of funds, as well as policies which allow the policyholder to simply select an investment focus (bonds, equities, real estate, etc.).
Futures	In the case of futures, the contracting party is obliged to buy or sell a standardised amount of an underlying instrument at an agreed price on a stipulated future date. See also derivatives, options.

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