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underwriter: an investment bank serving as the intermediary between an issuer of a security and the investing public. Generally, a group of investment banks assume the risk of buying a new issue of securities from a corporation or government entity and reselling them to the public. Underwriters make a profit on the difference between the price paid to the issuer of the security and the price offered to the public.
Uniform Gifts to Minors Act (UGMA): legislation that allows the transfer of assets to a minor, defined by most states as an individual under the age of 18. A custodian appointed by the donor manages the assets of an UGMA account until the child reaches majority age. UGMA assets are taxed at the child's rate: if the child is under 14, the first $750 of investment income is tax-free; the next $750 is taxed at the child's rate (generally 10%); income over $1,500 is taxed at the parents' top rate. If the child is 14 or older, the first $750 of investment income is tax-free and all income above $750 is taxed at the child's rate.
Uniform Transfers to Minors Act (UTMA): law which extends the Uniform Gift to Minors Act's definition of a gift to include real estate, fine art, patents and royalties. The law also raises the age for taking control of these assets to 21 in most states.
unit: the standard division of ownership in an annuity.
unmanaged: refers to an index or benchmark such as the S&P 500 that is not actively managed, but rather reflects movements in stock or bond markets.
up-front sales charge: a sales charge applied to the initial purchase of a mutual fund. See also load, contingent deferred sales charge (also known as a back-end load) and no-load fund.
U.S. Treasury securities: debt securities issued by the U.S. government and secured by its full faith and credit. Income from Treasury securities is exempt from state and local taxes. Also known as Treasuries. See Treasury bill, Treasury bond and Treasury note.
