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M

managed futures
Investment vehicle in which professional money managers known as commodity trading advisors manage client assets on a discretionary basis, using global futures markets as an investment medium.

managed portfolio
A portfolio for which one has the legal authority to buy and sell securities, futures, or other assets on behalf of the portfolio owners.

management fee
The charge that a fund manager assesses fund investors to cover operating costs. The fee generally ranges from an annual 0.5% to 2% of an investor's holdings in the fund, and it is usually collected on a quarterly basis.

mark to market
Recording the price or value of a security, portfolio, or account on a daily basis, to calculate profits and losses or to confirm that margin requirements are being met.

market-neutral investment strategy
A strategy that aims to preserve capital under any market conditions. The most common followers of the market-neutral strategy are funds pursuing a long/short investment strategy. These seek to exploit market discrepancies by purchasing undervalued securities and taking an equal, short position in a different, overvalued security.

market-neutral option arbitrage investment strategy
A strategy that seeks to exploit pricing differentials between options contracts or warrants and the stocks to which they are related. Those following the strategy typically purchase options or warrants, while taking short positions in the underlying stocks.

master-feeder fund
In the master-feeder structure, one or more investment vehicles with identical investment objectives (the "feeder funds") pool their assets in a common portfolio held by a separate investment vehicle (the "master fund"). This structure permits each of the feeder funds to be sold to a separate target market and through a different distribution channel even if the feeder fund, on a stand-alone basis, would not be large enough to support its operating costs. The feeder funds benefit from economies of scale available to the larger pool of funds invested in the master fund. The master-feeder structure is an innovation that has allowed asset managers to capture the efficiencies of larger pools of assets, while still delivering an investment product to smaller market niches.

maximum drawdown
The largest overall drop in an investment’s value occurring within a given period before it returned to its pervious high. Large maximum drawdowns indicate a higher degree of risk.

merger arbitrage investment strategy
Trading the stocks of companies that have announced acquisitions or are the targets of acquisitions.

mortgage-backed securities arbitrage investment strategy
An strategy with the aim of exploiting price differentials between various issues of mortgage-related bonds.

MSCI^®
Stands for Morgan Stanley Capital International Inc., a leading provider of equity (international and US), fixed income and hedge fund indexes.

multi-strategy
An investment style that combines several different approaches. The term often applies to funds of funds that allocate capital to a diverse group of hedge fund managers.