M&A

Abbreviation for Mergers & Acquisitions. See also Merger Arbitrage.

Macroeconomics

The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena such as changes in unemployment rates, national income, rate of growth, gross domestic product, inflation and price levels.

Managed futures

This globally oriented investment strategy involves trading in listed financial, currency and commodity futures markets. In managed futures funds, one may expect to find futures and forward contracts representing a wide range of items from agricultural products and livestock to gold, silver, interest rates and stock indexes.

Management fee

A fixed percentage fee charged to the fund for ongoing portfolio management services. The fee is typically calculated based upon the assets under management at the beginning or end of a specific period, and is unrelated to the fund's performance.

Margin call

A brokerage firm will make a margin call when a client's position (that was established using borrowed funds) declines past a certain point. When margin calls occur, the client must either deposit additional funds into their account or sell all or part of the position so that the account is brought up to the minimum maintenance margin.

Market capitalization

The total market value of a company or stock. Market capitalization is calculated by multiplying the number of outstanding common shares by their current market price. Investors generally divide equity markets into three basic market caps: large-cap, mid-cap and small-cap.

Market inefficiencies

Occur when securities valuations fail to reflect all relevant information in a timely matter. Astute investors can profit from market inefficiencies.

Market neutral

See Equity market neutral

Market risk

The risk of loss from fluctuations in securities prices.

Market timing

An investment strategy that allocates assets among different asset classes depending on the manager's view of the economic or market outlook. Unpredictability of market movements and the difficulty of timing entry and exit from markets add to the volatility of this strategy.

Mark to market

Valuing a security based on its current market value. Frequent mark to market valuations ensures that prices of securities reflect their true market value.

Maximum drawdown

The maximum drawdown refers to the largest peak-to-trough decline an investment, fund or commodity has suffered since inception, and is usually quoted as the percentage between the peak and the trough.

Merger arbitrage

An investment strategy involving the simultaneous purchase of stock in a company that is in the process of being taken over, and short-selling the stock of the firm intent on making the acquisition. This strategy involves a calculated bet that the proposed deal will be approved by regulators and shareholders alike. 

Mid-cap securities

Stocks with a market capitalization of approximately $250 million to $1 billion in Canada.

Modern portfolio theory

A portfolio management theory on how investors can construct portfolios to optimize or maximize expected returns based upon a given level of market risk, emphasizing that risk is an inherent part of higher reward.

MSCI (Morgan Stanley Capital International) World Index

An index that tracks the stocks of approximately 1,300 companies representing the stock markets of 22 countries.

Multi-manager fund

Fund that allocates investment management responsibilities to more than one manager.

Multi-strategy fund

Fund that invests assets among various strategies and (usually) numerous managers.

Mutual fund

A security that allows a group of investors to pool their money together and gain access to a diversified portfolio of equities, bonds, and / or other securities. Each mutual fund has a specific investment objective and must respect the investment parameters outlined in an legal offering document called a prospectus.