Core Plus

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DEFINITION

A fixed-income investment management style that permits managers to add instruments with greater risk and greater potential return - high-yield, global and emerging market debt, for example - to core portfolios of investment-grade bonds.

INVESTOPEDIA EXPLAINS

Investment advisors will advocate building portfolios with core holdings that consist of securities and/or mutual funds that reflect market positions and performance prospects that are so strong that these holdings may be maintained in the portfolio virtually forever. Such holdings might represent as much as 75% of the portfolio. The remaining balance would then consist of higher risk holdings, which may have shorter investment horizons than the core component of the portfolio. As such, a portfolio's core investments would represent a solid foundation to which more aggressive, diversified investments could be added.

With mutual funds, the core designation is used to describe categories of large-cap, mid-cap, small-cap, multi-cap and international funds that represent a blend of stocks in the value and growth investment styles.


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