This is the outright return achieved from a portfolio regardless of the underlying market performance. Traditional investments measure their success based on how they perform compared to their benchmark (relative returns) however hedge funds and alternative investments aim to deliver outright positive returns regardless of the underlying market performance.

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Active management refers to an investment strategy where investors take positions to achieve a specific objective without direct reference to the market portfolio.

This is the extra return generated by a fund above the market portfolio i.e. the excess return. Alpha can also be conceptualised as the outperformance of a fund against a benchmark or index. 

An asset class is a type of investment which an investor can invest in. Traditional asset classes include cash, equities, and bonds.

An alternative asset is an investment that does not conform to the traditional asset classes. It usually refers to more esoteric investment options for example hedge funds, private equity, venture capital, cryptocurrency, and art.

A measure of how sensitive an investment portfolio is to general market movements. The sign (+/-) indicates whether the portfolio’s returns move in line with the market (+), or in the opposite direction (-).   A portfolio with a beta greater than +1 tends to amplify the overall movements of the market, while a portfolio with a beta between 0 and +1 tends to move in the same direction as the market but not to the same extent. A portfolio with a beta of -1 tends to move in the opposite direction to the market.

These are financial securities whose value is based on an underlying asset. The price movements of a derivative generally follow the price movements of the underlying asset but derivatives generally require less capital to gain exposure to the underlying asset.

An emerging market economy is an economy that is in the process of becoming a developed economy. Emerging market economies usually offer potentially greater returns to investors due to higher growth rates but also offer greater exposure to some inherent risks due to their status.

These are a subset of global emerging markets with less advanced capital markets but offer potentially greater returns than conventional Emerging markets.

This is an investment that makes specific fixed payments on a pre-arranged schedule. Fixed income securities are different from equity securities in that their payments are legally required and not discretionary.

The underlying proposition of fundamental analysis is that there is a basic intrinsic value for a security or market and that this value can be found by evaluating the underlying factors.

Hedge funds are actively managed alternative investments that pool capital from various sources together and utilise sophisticated investment strategies to earn outsized returns for their investors. Hedge funds are generally only accessible to accredited or sophisticated investors.

This is an investment approach that aims to track an index. It is called passive because it simply aims to replicate the performance of the index instead of outperforming it. This is the opposite of active fund management.

A statistic, usually standard deviation, that measures the variation in a set of values.  A low standard deviation shows the values tend to be close to the average implying lower risk.

This is the particular investment process employed by a fund manager in the application of an investment style.

This is an investment strategy that encompasses environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns as well as positive societal impact.

The basic premise of technical analysis is that prices move in trends that persist and this characteristic can be used to achieve superior returns. Thus future prices can be predicted by using price patterns.