A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

F

Fee-based accounts

Fee-based accounts feature low and steady annual fees with little to no transaction costs. The financial advisor's compensation is directly related to the size of the assets rather than the level of trading activity. These accounts are popular with fee-sensitive clients.

Fixed-income arbitrage

This strategy aims to profit from temporary price inefficiencies among related fixed-income securities and their derivatives. The strategy will typically go long and short two related debt securities in an attempt to capture a converging spread. An example would be to go long corporate bonds and short government bonds of similar duration.

Front-end load

A front-end load is a charge levied to a fund at the time it is purchased.

Fund codes

Alphanumeric codes used to identify funds for purchases and redemptions in the investment management industry. For example, the BluMont Hirsch Performance Fund's code is BCC 500.

Fund manager

Appointed by the trustee and responsible for the governance and management of the hedge fund, with authority to hire third parties including investment advisors, custodians, administrators, etc. Typically the sponsor/promoter and fund manager are one in the same.

Fund of hedge funds

A fund of funds invests in a number of hedge funds and hedge fund strategies that generally are uncorrelated to each other. Generally, a fund of hedge funds will have at least 20 separate funds under its umbrella of investments.

Fund sponsor/promoter

Handles marketing and client services.

Fundamental equity analysis

An equity valuation method that analyzes the fundamental characteristics of a stock in an effort to determine the intrinsic value of that security. Fundamental managers analyze financial statements, evaluate the management of companies and determine the impact of macroeconomic and industry conditions on the price of stocks.

Futures contract

Traded on an organized exchange and based on the exchange's rules, a futures contract constitutes an agreement calling for the delivery of a commodity at a pre-determined future date at a price established at the time of contracting.