An assessment of the extent to which a stock fund or other similar investment fund's assets have appreciated or depreciated, which may have tax implications for investors.

Positive exposure would mean that the assets in the fund have appreciated and that shareholders will have to pay taxes on any realized gains on the appreciated assets. Negative exposure denotes that the fund has a loss carryforward that can cushion some of the capital gains.

Calculated as:



|||For example, a stock fund with a million shares currently has assets that are worth a total of $100 million. Six months ago, the assets were only worth $50 million and the fund still has $10 million worth of losses that can be carried forward. In this case, the capital gains exposure is 40% or, in other words, if the fund manager realizes the gains, each investor will have to pay taxes on a $40 capital gain.