We believe a glossary is key for any client trying to navigate through the range of complex terms and jargon in our industry.
Our most frequently defined terms are defined below but if there's something you think we should add, please contact us.
A fund which seeks to generate investment returns by using non-traditional investment strategies and tools such as short selling, leverage, programme trading swaps, arbitrage and derivatives. Their returns tend to be uncorrelated with standard market indices. They target positive returns in all market conditions.
Action taken to protect the value of a portfolio against a change in market movements. It is normally used to reduce, minimise or eliminate risk, although similar techniques can also be used to speculate in a market.
High yield bonds
A bond rated 'BB' or below (on Standard & Poor's credit rating scale) because of its high default risk. Also known as a junk bond. High yield bonds pay higher yields in order to compensate bondholders for the additional credit risk over and above less risky (investment grade rated) bonds.