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The investments a variable annuity's separate account fund, a mutual fund, or other fund makes are considered the fund's underlying investments.
The value of a single share or unit of the fund is based on the combined value of all of its underlying investments, minus fees and expenses, divided by the number of outstanding shares or units.
In some cases, when the item underlying a derivative investment is a security, such as the individual stock underlying an equity options contract, it is also called an underlying investment.
However, when the underlying item is a consumable commodity, such as corn, or a financial product, such as an equity index, it is called the underlying product, the underlying instrument, or sometimes simply the underlying.Yahoo Finance - Cite This Source - This Definition
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