Capital preservation fund
An investment fund that enables investors to benefit from advances on the financial markets while providing a large measure of protection against losses exceeding a specified percentage. UBS offers two types of capital preservation funds: Limited Risk Funds and Dynamic Floor Funds.
Capitalisation rate (static discounted cash flow method)
It is made up of the charges on a property (interest costs, fees, operating expenses, insurance premiums, maintenance and repair costs, amortisation/depreciation of buildings, risk of rental losses, administrative costs) and is expressed as a percentage of the capitalised-income value. As one of the elements used to calculate the capitalised-income value, the capitalisation rate is determined by an independent expert based on expenses which are expected to be incurred in connection with the property.
This is calculated on the basis of current rental income and a property-specific interest rate (capitalisation rate). Rental income must seem appropriate and obtainable over the long term in order to be fully included in the calculation. The capitalised-income value is the major factor used in valuing income properties.
Cash flow represents the net income earned in a financial year before write-offs and provisions.
Cash flow yield
Net income earned before write-offs and provisions in proportion to the current market price, less the accumulated earnings included in this price.
Collective security evidencing one or more investment fund units.
An investment fund in the form of a company (normally a stock company) with fixed capital. A closed-end fund is not obliged to redeem issued units at the request of the unitholder. Units of this type of investment fund may not be sold publicly under Swiss law. As opposed to an open-end fund.
Collective investment contract
The collective investment contract is the legal basis for the investment fund business in Switzerland. This agreement is concluded between the management company, the custodian bank and the investor. It is the legal basis for the management of the investment fund by the management company on the one hand and for the participation of the investors in the assets of the investment fund on the other. The collective investment contract is embodied by the fund regulations.
Commission de Surveillance du Secteur Financier
The "Commission de Surveillance du Secteur Financier" (CSSF) is the state supervisory authority which monitors the investment fund business in Luxembourg.
Issuing commission and redemption commission. Fee charged on the subscription or redemption of fund units.
Investment funds which invest the assets primarily in tradable commodities.
Commodity Traded Advisor (CTA)
CTAs invest exclusively in futures and other derivatives. The majority of CTAs pursue a trend-following strategy. This acknowledges the fact that temporary trends do exist on the financial markets. Trend followers replicate a trend and stand to gain during both bull and bear market periods. A further strategy is to identify exactly when these changes in trends occur and to profit from them.
An investment fund which has no legal personality. By purchasing units, the investor concludes a collective investment contract with the management company and the custodian bank. The unit holder does not have any rights of ownership to the fund assets, but rather a claim to participate in the assets and income of the fund. As opposed to a corporate form.
Bonds which feature a conversion right entitling the holder to convert the bond into shares of the company in question at a certain point in time and at a conversion ratio set in advance. Following the conversion, the bond expires.
The Core Portfolio is that part of the portfolio of a (dynamic) capital preservation fund that serves to ensure that the capital is preserved. Investments are generally in money market instruments and bonds in the fund's reference currency.
An investment fund which has its own legal personality, usually a joint-stock company. The units are issued in the form of equities. The investors are shareholders and have both proprietary and membership rights. The Swiss Investment Fund Act does not recognise funds set up in corporate form, but it is widely used in other parts of Europe and the United States.
According to an OECD study, corporate governance describes the ways in which mutual responsibilities are distributed between a company's management and its shareholders.
Corporate social responsibility
Corporate social responsibility may be defined as transparent corporate conduct, which is based on ethical values and takes into account the interests of employees, society and the environment, thereby seeking to create sustainable value for the company and its shareholders (Definition: Prince of Wales Business Leader Forum).
A measure of the degree to which the price trends of various investment categories or instruments move in the same direction. The correlation quantifies the strength of the relationship as a figure between -1 and +1. The closer the coefficient is to 1, the stronger the correlation. If the coefficient is -1, the investments and the benchmark move in opposite directions. If the value is 0 there is no correlation.
Cost Averaging. Strategic exploitation of price fluctuations. This method of investing takes advantage of regular payments. The investor invests the same amount every month, and thus acquires more units when the issue price is lower and less units when it is higher. Over the long term, the investor thus attains a more favourable cost price than with the regular purchase of a fixed number of units over the same period of time.
An investment fund which invests primarily in equities of a specific country.
The interest or dividend certificate attached to a security. These certificates enh3 their owners to receive the income on the respective due dates and also enh3 them to exercise the rights evidenced by these certificates.
Measurement of the quality of a borrower, particularly in respect of solvency and willingness to pay. The credit rating makes it possible to draw conclusions regarding the quality of bonds and the probability that interest payments will be made regularly and that the principal amount will be repaid at maturity.
Risk of the issuer of a bond becoming insolvent. See also credit rating.
See Commission de Surveillance du Secteur Financier.
Currency of account
Currency in which the fund's accounts are kept and in which the net asset value and the issue and redemption prices are calculated. Not to be confused with the investment currency or the reference currency.
The custodian bank is responsible for keeping the entire assets of the fund in its custody and for the issue and redemption of fund units. It ensures that the fund management company complies with the provisions of the Investment Fund Act and the provisions of the fund prospectus.
Custody account administration fee
Fee charged annually for the safekeeping and administration of securities.