AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

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Glossary

AIMA's Glossary has been developed for all those with an interest in the alternative investment industry - from the beginner to the advanced practitioner.

You will find a considerable overlap of content with the traditional fund management industry - the instruments used, the service providers employed, etc.  However, the hedge fund industry is individual in the way in which it uses these resources.

For reasons of law and accuracy, this is not a wiki.  It is a work-in-progress, however, and we invite you to submit new items for inclusion below (including the proposed definition).

  • We express our sincere thanks to Stanley Marchon, Vincent Kuhn, Nicolas Watin-Augouard, Stephen Foster and Sunil Gopalan for the creation of this resource. 
  • Special thanks are also extended to Anne Taulbut and Jennifer Nye of Katten Muchin Rosenman Cornish for the extensive legal review.
 
exchange of futures for swaps

A privately negotiated transaction in which a position in a physical delivery futures contract is exchanged for a cash-settled swap position in the same or a related commodity, pursuant to the rules of a futures exchange.

exchange rate

The price of one currency stated in terms of another currency.

exchange-traded commodities

ETCs are investment vehicles (asset backed bonds) that accurately track the performance of an underlying commodity, index or sub-index. They enable investors to gain exposure to (or invest in) commodities, on-exchange without having to play the futures markets or risk taking delivery of the underlying itself.

exchange-traded fund

An ETF is an investment fund, units of which can be bought and sold on a stock exchange. They are usually used by tracker funds. The key difference between ETFs and unit trusts is that they are tradeable on an exchange.

exercise

To elect to buy or sell, taking advantage of the right (but not the obligation) conferred by an option contract.

exposure

The extent to which a hedge fund is vulnerable to changes in a given financial market. Exposure can be measured on a net or gross basis. See Gross exposure. See Net exposure.

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