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Passive portfolio strategy |
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Passive portfolio strategyA strategy that involves minimal expectational input, and instead relies on diversification to match the performance of some market index. A passive strategy assumes that the marketplace will reflect all available information in the price paid for securities, and therefore, does not attempt to find mispriced securities. Related: Active portfolio strategy.Passive portfolio strategy Similar MatchesPortfolio internal rate of returnPortfolio internal rate of returnThe rate of return computed by first determining the cash flows for all the bonds in the portfolio and then finding the interest rate that will make the present value of the cash flows equal to the market value of the portfolio. Characteristic portfolioCharacteristic portfolioA portfolio which efficiently represents a particular asset characteristic. For a given characteristic, it is the minimum risk portfolio, with portfolio characteristic equal to 1. For example, the characteristic portfolio of asset betas is the benchmark. It is the minimum risk beta = 1 portfolio. Portfolio variancePortfolio varianceWeighted sum of the covariance and variances of the assets in a portfolio. Hedged portfolioHedged portfolioA portfolio consisting of a long position in the stock and a long position in the put option on the stock, so as to be riskless and produce a return that equals the risk-free interest rate. Inefficient portfolioInefficient portfolioGroup of assets dominated by at least one other portfolio under the mean variance rule. For example, if A has both lower return and higher volatility than B, we say A is dominated by B. Further SuggestionsStructured portfolio strategyTilted portfolio portfolio Foreign portfolio investment Levered portfolio Well diversified portfolio Normal portfolio Passive portfolio Modern portfolio theory Portfolio opportunity set Duplicative portfolio Portfolio turnover rate Complete portfolio Portfolio Diversified portfolio Portfolio Feasible set of portfolios Portfolio capital Portfolio theory Portfolio flow Minimum variance portfolio Select ten portfolio Excess return on the market portfolio Portfolio approach protected portfolio |
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