Exposure

What is exposure?

It is a key investment concept. In some ways, it is similar to risk, but with less negative connotations. Risk is an inevitable event in financial markets and should be reduced as far as practicable, and investors may actively seek exposure to different asset classes.

Where have you heard of exposure?

As an investor, you will understand the concept of exposure, both in terms of potential adverse situations you face and in terms of your position in a particular asset class (such as stocks or currencies)

What you need to know about exposure...

Exposure is a broad concept with three different meanings. The first is the current market value of a number of open positions, including derivatives manner of holding any leverage exposure. This is followed by the sum of the risk at any given time and, finally, the proportion of an investment fund or trust invested in a particular market or asset.

In all three cases, the scope of the investor's liability for one or more assets is involved.