Net short

Net short refers to a portfolio that, on balance – adding up the long positions and deducting the short positions has an overall negative exposure.

Net long

Net long refers to a portfolio that, on balance – adding up the long positions and deducting the short positions – still has a positive exposure to the group of assets that the portfolio is invested in.

Short investing

To go “Short” in the context of an investment refers to a negative holding of something (selling something you do not own). It is the opposite of long investing. “Net short” is where an investor has more short positions than long positions in a given asset, industry or market in his / her portfolio. EXAMPLE: When investment manager A does not own a […]

Protection strategies

Some hedge fund strategies are designed to make money when other assets are falling in value. Collectively these can be referred to as protection strategies. The simplest of these is a net short equity or credit fund but other types exit including Negative Correlation funds that seek out investments that benefit when certain asset prices […]

NAV

NAV – short for Net Asset Value See also Net Asset Value per share

ETF

ETF is an abbreviation for Exchange Traded Fund. These are funds, traded on an exchange (like an investment company), that issue and redeem shares to match supply and demand (like a zero discount mechanism), and generally track an index which could be based on a range different asset classes. The manufacturers of ETFs have become […]

Equity hedge

Equity hedge funds can be long/short funds that have a portfolio where the long positions are more or less offset by short positions, or equity long bias, funds that are almost always net long. These funds may seek to sell an investment they think is going to fall in value and buy a corresponding investment that […]

Long investing

Long investing refers to a positive holding of something. It is the opposite of short investing. A portfolio that does not take short positions is referred to as a “traditional long only” strategy. In this model, if you do not like a stock you either don’t own it, or, if that is too risky, you underweight […]

Gearing

Gearing – A measure of how much a company has borrowed, calculated as debt (excluding other short-term liabilities) divided by net assets and expressed either as a percentage or as a number where 100 = no gearing and 110 = 10% gearing. NB if in doubt, it is recommended that the investor should check.

Glossary

Net short