Glossary

H

• Hands-off management
  In hands-off management (as opposed to hands-on management), investors do not get involved in corporate decisions and limit their role to that of a mere provider of capital.
• Hands-on management
  The venture capital company supports company management in a variety of areas, ranging from strategic decision-making and product development to establishing customer contacts and recruiting new staff.
• HCPI
  The HCPI is used for measuring inflation in an international, mainly inner-European comparison. It is calculated according to uniform concepts, methodologies and processes, reflecting the price development in the various countries; it is based on the respective national consumption habits. The German HCPI is calculated by the Federal Statistical Office. The first steps to create a harmonized index were already taken in the late 1980s. However, there was no binding rule, so that these efforts proved little successful. This only changed when the Maastricht Agreement took effect and enabled a broader harmonization.   The HCPI surveys the consumption spending of private households. Thus, it differs from the concept of national accounting for it only takes into account the private spending that actually occurred. However, there is no uniform weighting formula for the member states of the European Union. Furthermore, national particularities as regards consumption habits are not abstracted, either. Based on the national HCPIs, the Statistical Office of the European Union (Eurostat) calculates the consumer price indices for the European Union, the Euro Zone and the European Economic Community. The preliminary result is published around the 25th of the reporting month; the final results are published around the 15th of the following month.  
• HDAX
  In total, HDAX ® includes the 110 largest equities in Prime Standard.
• Hedge Funds Certificates
  These investment products allow private investors a chance to invest in the hedge fund arena. The certificates are issued across a basket of various hedge funds – similar to a fund of funds, which holds stakes in several different funds. While classical investment funds focus on outperforming their corresponding benchmark, hedge funds use the entire spectrum of financial instruments to earn a yield independent of market developments. Aside from shares and bonds, they invest in currencies, commodities and futures such as options. Hedge fund managers are even allowed to sell short or to invest on loans. The pretense of this strategy is to earn profits even when prices are falling. A huge variety of investment strategies are represented in these funds. They range from following macroeconomic trends using investments in currencies or commodities to systematic but nevertheless highly risky trading in futures. Moreover, hedge fund managers often require minimum investment levels to the tune of six figures. They are thus too expensive for most private investors as a direct investment tool. Besides of that hedge funds are better suited to being just one part of a mixed depot because of their highly risky nature.With comparably less investment capital, private investors can use Hedge funds certificates to benefit from hedge fund strategies and evenly distribute the risk.
• Hedging (warrants)
  If an investor expects that stock prices will fall, he can hedge his stock portfolio by acquiring put warrants that entitle him to sell his shares at a predetermined price – e.g. at the current market price – within the period stipulated in the warrant contract. In doing so, he will prevent the value of his portfolio from decreasing. Although the investor must pay a price, in the form of a warrant premium, to protect his assets, this price is far lower than the loss he would incur as a result of the expected downturn in the market.
• Historical volatility (warrants)
  Average volatility of an underlying instrument, usually calculated on the basis of the last 100 closing prices.
• Holding period
  The holding period in Germany was twelve months – i.e., capital gains resulting from the purchase or sale of securities held for less than a year were subject to income tax. As of 2009 with the introduction of the 'Abgeltungssteuer' (flat rate withholding tax) the holding period was abandoned.