Large-cap securities

Stocks with a market capitalization over approximately $1 billion in Canada. For example, Royal Bank of Canada.

Largest monthly gain

An investment's highest monthly gain since inception.

Largest monthly loss

An investment's highest monthly loss since inception.

Leverage

Involves borrowing money to invest with the intent of earning a greater rate of return than the rate at which the additional monies were borrowed.

Liability

A company’s legal debts or obligations that arise during the course of business operations. These are settled over time through the transfer of economic benefits including money, goods or services.

Limited Partnership (L.P.)

Two or more partners united to conduct business jointly, and in which one or more partners are liable only to the extent of the amount that partner has invested.

Liquidity

An asset is said to be "liquid" or "have liquidity" when it may be bought or sold in the market without affecting the asset’s price.

Lock-up period

A period of time when investors are unable to exit an investment. Lock-ups are common for funds that are designed as mid-to-long-term investments.

Long exposure

The percentage of a fund's assets that are invested in long positions. For example, a manager may be 100% long and 60% short, giving him a market exposure of 40% net long. The higher the long exposure, the more a fund is exposed to the market.

Long position

A long position is established when an investor buys a security. For example, an owner of 1,000 shares of stock is said to be "long the stock".

Longest drawdown in months

The longest drawdown period for a particular investment expressed in number of months. This is not necessarily the length of the maximum drawdown.

Longest recovery in months

The most months an investment's net asset value has taken to recover from the lowest point of a drawdown back to the NAV it had when the drawdown first began.

Long/short equity

An investment strategy that involves buying undervalued stocks and short selling overvalued stocks. Long/short funds typically benefit from variable exposure (they can be net long, market neutral or even net short) and the use of leverage. This is the most common type of hedge fund today.