Contingent Immunization
Definition of 'Contingent Immunization'A method of fixed income portfolio management, whereby managers are granted significant powers of control over the selection of products to be added and removed from the portfolio, as long as the products remain profitable. Should these products become unprofitable past a set threshold, the manager must then capitalize the security under immunization procedures. |
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Investopedia explains 'Contingent Immunization'Similar to the portfolio insurance methodology used in the equity markets, contingent immunization provides managers with the ability to replace underperforming fixed income assets with better performing ones while restricting their powers in cases where declines in profits occur. |
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