Well-diversified portfolio

Well-diversified portfolio

A portfolio that includes a variety of securities so that the weight of any security is small. The risk of a well-diversified portfolio closely approximates the systematic risk of the overall market, and the unsystematic risk of each security has been diversified out of the portfolio.

Well-Diversified Portfolio

A portfolio that has invested in many different types of security in order to hedge against the securities already in the portfolio. Ideally, this reduces the risk inherent in any one investment, and increases the possibility of making a profit, or at least avoiding a loss. This may also reduce the expected return on the fund, but it depends on level and type of diversification. There are two main types of diversification that a well-diversified portfolio may utilize. Horizontal diversification involves investing in similar types of investments. Examples include investing in several technology companies or in different types of bonds. Vertical diversification involves investing in very different securities; for example, one may choose to invest in securities traded in different countries or in both winter clothing and swimsuit companies. Both types of diversification may be as broad or narrow as the fund's manager chooses. In general, the broader the diversification, the less risk and less return.
Mentioned in ?
References in periodicals archive ?
"At a time where US-China trade tensions, slowdowns in major economies and the ongoing uncertainty over Brexit have spurred recent market volatility, the experiences of the 34 'surviving' investment trusts is a timely reminder that a considered and well-diversified portfolio can help withstand even the toughest market conditions."
a well-diversified portfolio with a sizable and strategic landbank for future expansion, complemented by solid brand equity and a highly experienced management team;
In assigning the rating, PhilRatings considered ALI's well-diversified portfolio with a sizable and strategic landbank for future expansion, sustained healthy outlook for the economy and real estate industry, continuously growing profitability, and sound capitalization.
Tritax EuroBox plc invests and manages a well-diversified portfolio of well-located Continental European logistics real estate assets that are expected to deliver an attractive capital return and secure income to shareholders.
Having a portfolio that includes small and mid-cap companies, in addition to international, both developed and emerging market countries will help produce a well-diversified portfolio that reduces risk.
"The Baa1 rating reflects Glencore's solid position as a large, diversified commodities mining and marketing company with a large and well-diversified portfolio of mining assets," said Moody's.
The Fund will invest in and actively manage a well-diversified portfolio of financial services opportunities and aim to improve the lives of at least 1.7 million underserved customers," said Mundra.
Ahlibank has a well-diversified portfolio and funding base which augurs well for 2019.
PhilRatings said the ratings were assigned due to ALI's well-diversified portfolio with a sizable and strategic landbank for future expansion, complemented by solid brand equity and a highly-experienced management team.
On that note, he outlined the most critical aspects of a well-diversified portfolio. This includes articulating your financial goals, analyzing your cash flows, and knowing the items that you're invested across.
DEP's obligations are supported by a sizable and well-diversified portfolio of resources, but increasing environmental costs related to coal ash remediation are expected to drive power costs higher.
"But if they are working with a financial planner and have a well-diversified portfolio with stocks, bonds and alternatives, and an emergency fund on the side for when the boiler blows up or the cars dies and they have to get money now, they are going to be fine," he said.