Style Analysis

The general idea of Style Analysis is to attempt to explain, or understand, the return stream of a given fund in terms of a set of asset classes (or style factors). Specifically, for a set of n asset classes, to try and find a corresponding set of n fixed weights (or percentages). These weights are then applied to the returns of their respective asset classes, with the hope that their sum closely approximates the returns of the given fund, for each data-period in succession and over the range of data periods as a whole. At the same time, it is desired that the composition determined by the analysis reflect the actual style of the target fund.…

Short Selling

Short Selling involves the sale of a security not owned by the seller, a technique used to take advantage of an anticipated price decline. To make a short sale, the seller borrows securities from a third party in order to make delivery to the purchaser. The seller returns the borrowed securities to the lender by purchasing the securities in the open market. If the seller can buy that stock back at a lower price, a profit results. If the price rises, however, a loss occurs. A short seller must generally pledge other securities or cash with the lender in an amount equal to the market price of the borrowed securities. This deposit may be increased or decreased in response to changes in the market price of the borrowed securities.…

Sector: Technology

Sector: Technology funds emphasize investments in securities of the technology arena. Some of the sub-sectors include multimedia, networking, PC producers, retailers, semiconductor, software and telecommunications.…

Sector: Financial

Sector: Financial is a strategy that invests in securities of bank holding companies, banks, thrifts, insurance companies, mortgage banks and various other financial services companies.…

Sector: Energy

Sector: Energy is a strategy that focuses on investment within the energy sector. Investments can be long and short in various instruments with funds either diversified across the entire sector or specializing within a sub-sector, i.e., oil field service.…

Redemptions

The time period in which an investor in a fund may withdraw his or her capital from the fund. For example, quarterly redemption allows an investor to withdraw capital every quarter.…

Program/Fund Category

Inclusion of a trading program/fund in any particular sector is based on information contained in the trading program's/fund's disclosure documents, responses to Barclay's Fund Addition questionnaire, fund offering documents, discussion with the program/fund manager, and the opinion of BarclayHedge, Ltd. Since the categorization of market focus and trading styles is subject to change and is of necessity subjective in nature, BarclayHedge, Ltd. does not take any responsibility for including or failing to include a trading program in a particular sector.…

Sharpe Ratio

The Sharpe Ratio is equal to compound annual rate of return minus rate of return on a risk-free investment divided by the annualized monthly standard deviation.…

Relative Value Arbitrage

Relative Value Arbitrage attempts to take advantage of relative pricing discrepancies between instruments, including equities, debt, options and futures. Managers may use mathematical, fundamental or technical analysis to determine misvaluations. Securities may be mispriced relative to the underlying security, related securities, groups of securities or the overall market. Many funds use leverage and seek opportunities globally. Arbitrage strategies include dividend arbitrage, pairs trading, options arbitrage and yield curve trading.…

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