Hedge Fund Terms A

Active Premium – This is the Investment’s measurement of it’s return annually minus the Benchmark’s annualized return.

Additions – This is the frequency that additional funds are brought into the fund.

Administrator – This is the offshore fund entity that is in charge of the the back office work and the fund’s individual accounts.

Alpha – This measures the fund’s average performance separate of the market. For example, if a fund has an alpha of 2.0, and the market return was 0% for a given month, then the fund would, on average, return 2% for the month. To view the formula for Alpha, please download the word document.

AUM – Assets Under Management

Average Annual Return or Average Rolling 12 Month Return ­– This is the average of the rolling 12 month performance periods of the fund.

Average Monthly Gain – The average of the profitable months of the fund.

Average Monthly Loss – The average of the negative months of the fund.

Average Monthly Return – The average of all the monthly performance numbers of the fund.

Average Number of Positions – This is the number of securities that a fund holds on any given day.

Average Portfolio Turnover – The percentage of the portfolio that is bought and sold each year.

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