Many terms in fixed-income investing - "delta hedging," "kurtosis," "gamma" - are bantered about all the time. But do most sponsors, consultants, and managers, know what they mean?
To help, Lotsoff Capital Management, Chicago, produced a new edition of its glossary of bond investment terminology, written, as it says, in "the King's English."
The lexicon covers fixed-income investment terms. It includes performance analytic terms as well, including Sortino ratio and information ratio.
A speaker at a recent conference of sponsors and managers said, as noted by a Lotsoff release:
"The classical capital ideas are suspected of suffering from kurtosis, skewness and other less familiar problems. They are under attack from non-linear hypotheses, and overwhelmed by fears of discontinuities rather than pricing volatility. And if you cannot explain that sentence in total to your clients or investment committees, you should probably not be charging fees or managing assets."
This type of statement the Lotsoff glossary tries to translate into the King's English so providers of investment services at least may feel justified in charging for their work.