International Banking Guide Continued

Stock market
Another term for stock exchange.

Switzerland
Tax haven for international investors, renowned for private banking facilities. Home to more than £2.5 trillion worth of private clients’ money.
Withholding tax that investors can ‘claw back’ if their country of residence has a double taxation with Switzerland, means a lot of money invested here is clean and quite substantial.

International Banking Guide Continued & Term Insurance

Top-down
A macro-economic perspective of investment. Incorporates factors such as political change, oil prices and currency risks (among others).

Traded endowment policy
An endowment policy that the holder has decided - or been forced - to surrender. Good for expatriates to buy because they are only subject to capital gains tax for the proportion of the time you spend in the UK. And if you cash them in as a non-resident, you won’t have to pay CGT at all.

International Banking Guide Continued & Ucits

Ucits
Undertakings for Collective Investments in Transferable Securities. A European directive to facilitate the sale of collective investments across borders in the EU.
Growing numbers of companies are forming funds in this structure and basing them in Luxembourg and Dublin to sell to European investors.

Umbrella fund
Several funds under one banner between which investors can switch without facing burdensome financial penalties.
Umbrella funds tend to be based in low-tax centres, such as the Channel Islands, Luxembourg and Dublin.

Unit linking
When buying a life insurance policy, you take units, rather than shares in that policy. The life company then takes your money and invests in underlying assets such as equities, bonds and cash. The value of your units will vary depending on the underlying investment performance.

International Banking Guide Continued & Unit Trusts

Unit trusts
Unit Trusts pool investors’ money so that fund managers can invest it on their behalf. This money is then invested in a wide range of assets that will be more varied than the investor could achieve independently. The idea is to make your investment grow as quickly as possible. Unit trusts are designed to provide a straightforward, inexpensive and convenient way into the stockmarket.

Volatility
The fluctuations of a given stock or market. The more volatile the investment, the greater the risk of your investment losing money. However, volatile shares are often the ones that deliver the greatest returns.

Warrant
Warrants and call options for common stock are similar financial tools.
Both allow holders to exercise the warrant/option up to expiration date, in return for a certain number of shares.
Key differences are that options are issued by independent parties, while the warrant is issued and guaranteed by the corporate issuer itself.
The lifetime of a warrant is generally measured in years, while the lifespan of an option tends to be months.