| |
 |
Hawk |
| |
An investor who has a negative
view towards inflation and its effects on markets.
Hawkish investors prefer higher interest rates in
order to maintain reduced inflation. |
 |
 |
|
Health Insurance |
| |
A policy that will pay specifies
sums for medical expenses or treatments. Health
policies can offer many options and vary in their
approaches to coverage. |
|
|
|
Hedge |
| |
Any transaction with the
objective of limiting exposure to risk such as changes
in exchange rates or prices. |
|
|
|
Hedge Fund |
| |
A pooled investment vehicle
that is privately organised, adminis tered by investment
management professionals and generally not widely
available to the general public. Many hedge funds
share a number of characteristics; they hold long
and short positions, |
|
|
|
|
|
|
|
|
|
| |
use leverage to enhance returns,
pay performance or incentive fees to their managers, have
high minimum investment requirements and target absolute
returns. Generally, hedge funds are not constrained by
legal limitations on their investment discretion and can
adopt a variety of trading strategies. The hedge fund
manager often has its own capital (or that of its principals)
invested in the hedge fund it manages. |
|
|
|
Herding |
| |
Hedge fund managers while taking
a position may encourage other investors to follow this
trend. |
| |
|
|
|
|
High Water Mark |
| |
The assurance that a fund only
takes fees on profits actually earned by an individual
investment. For example, a ?10 million investment is made
in year one and the fund declines by 50%, leaving 5 million
in the fund. In year two, the fund returns 100% |
| |
|
|
|
|
|
| |
bringing the investment value
back to 10 million. If a fund has a high water mark it
will not take incentive fees on the return in year two
since the investment has never grown. The fund will only
take incentive fees if the investment grows above the
initial level of ?10 million. |
| |
|
|
|
|
High-Yield Bond |
| |
Often called junk bonds, these
are low grade fixed income securities of companies that
show significant upside potential. The bond has to pay
a high yield due to significant credit risk. |
| |
|
|
|
|
Hurdle Rate |
| |
The minimum investment return a
fund must exceed before a performance-based incentive
fee can be taken. For example if a fund has a hurdle rate
of 10% and the fund returned 18% for the year, the fund
will only take incentive fees on the 8 percentage points
above the hurdle rate. |
| |
|
|
|
|
