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What the investment parameters mean
| Gross exposure ratio | Total invested as a % of fund's value |
| Net exposure ratio | Total long exposure minus total short exposure |
| Weighting | Amount invested in each security as a % of fund's value |
| Index exposure | % of the fund's value invested in an index (to hedge the stocks) |
| Net exposure on stocks | Long exposure on stocks minus short exposure on stocks |
Example of a Model Portfolio
| Stock | L/S | Weighting | Short | Long | |
| Euro Stoxx 50 | SX5E | S | 0.5 | 0.5 | 0 |
| FTSE 100 | UKX | S | 0.5 | 0.5 | 0 |
| Barclays | BARC | S | 0.07 | 0.07 | 0 |
| BT Group | BT. | S | 0.07 | 0.07 | 0 |
| Capita | CPI | S | 0.07 | 0.07 | 0 |
| HBOS | HBOS | S | 0.07 | 0.07 | 0 |
| Reuters | RTR | S | 0.07 | 0.07 | 0 |
| Smith & Nephew | SN. | S | 0.07 | 0.07 | 0 |
| Tesco | TSCO | S | 0.07 | 0.07 | 0 |
| Vodafone | VOD | S | 0.07 | 0.07 | 0 |
| Alliance Boots | AB. | L | 0.15 | 0 | 0.15 |
| BP | BP | L | 0.15 | 0 | 0.15 |
| Br. American Tobacco | BATS | L | 0.15 | 0 | 0.15 |
| Diageo | DGE | L | 0.15 | 0 | 0.15 |
| Sabmiller | SAB | L | 0.15 | 0 | 0.15 |
| BG Group | BG. | L | 0.15 | 0 | 0.15 |
| Glaxosmithkline | GSK | L | 0.15 | 0 | 0.15 |
| Gross exposure ratio | 2.61 | 1.56 | 1.05 | ||
| Net exposure ratio | -0.51 | ||||
| Net exposure on stocks | 0.49 | ||||
| Index exposure | -1.00 |
In this example:
Gross exposure ratio = 261%
Net exposure ratio = 51% net short
Net exposure ratio = Index exposure + net exposure on stocks
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