Financial Terms

Underwriter – A business entity that effects the issuance and distribution securities from a company or other issuing body to the public. An underwriter plays a role in determining the offer price of a security, buys them from the issuer, and sells them to investors. For a commission, underwriters takes on an insurer-like role in that they may be forced to sell the securities for less than they paid for them, or retain the securities themselves if they cannot sell all of the securities at the specified offering price.

Unit trust – A collective investment scheme that pools money from investors to invest in a portfolio of assets to achieve the investment objectives of the unit trust. Investments in the trust are made by buying units in the trust. The investment fund is set up under a trust deed. The price of each unit is based on the market value of the underlying assets that the unit trust has invested in. The number of units investors receive depends on the amount of their investment less any sales charge they are required to pay. Investors are effectively the beneficiaries under the trust.