Inefficient portfolio

(redirected from Inefficient Portfolios)

Inefficient portfolio

Group 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.

Inefficient Portfolio

A portfolio that provides too low a return for the risk. That is, an inefficient portfolio has taken on so much risk that the return is not worth the effort. In Markowitz portfolio theory, an inefficient portfolio is graphically represented as any portfolio that does not follow the efficient frontier, or the set of portfolios that provide the highest return at each different level of risk.
References in periodicals archive ?
Energy security is reduced - and prices increased - when countries hold inefficient portfolios that are overexposed to fossil price risks.
Their inefficient portfolios and skewed risk taking is hurting results, and as the numbers show, the cost is very high.
Of the 69 percent of participants in the report with inappropriate risk or inefficient portfolios, 38 percent have very risk-inappropriate or very inefficient portfolios.