Portfolio Investment Strategy

Definition

Portfolio Investment Strategy. The manner in which the Portfolio Manager tries to reach the investment Portfolio's objectives. It denotes the set of concrete plans and constraints (investment strategy, hedging strategies) that help shape overall Portfolio Management activities.

The emphasis of a portfolio strategy depends heavily on the mandate and business model of the organization. A concrete Portfolio Strategy might be specified using the following components:

• The time horizon of the strategy, especially if the strategy involves a material deviation from the prior state
• The overall volume / size objectives (e.g. a growth, steady or reduction strategy) for the Portfolio
• The target characteristics and acceptable performance metrics expressed in a Portfolio Allocation choice

Besides the upfront specification, a portfolio strategy may also involve contingent elements that reflect

• the performance of the portfolio
• market developments (e.g. demand / supply and competition)
• broader economic developments
• other significant risk factors

See Also

• Credit Portfolio Strategy for more credit specific elements
• Portfolio Management

Disclaimer

This entry annotates a FIBO Ontology Class. FIBO is a trademark and the FIBO Ontology is copyright of the EDM Council, released under the MIT Open Source License. There is no guarantee that the content of this page will remain aligned with, or correctly interprets, the concepts covered by the FIBO ontology.