Core Plus

What does 'Core Plus' mean

Core plus is 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.

BREAKING DOWN 'Core Plus'

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.

RELATED TERMS
  1. Core Holding

    A long-term investment that forms the foundation of an investor's ...
  2. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment ...
  3. Investing Style

    In the context of stock mutual fund investing, refers to using ...
  4. Holdings

    The contents of an investment portfolio held by an individual ...
  5. Style Drift

    The divergence of a mutual fund from its stated investment style ...
  6. Style Box

    Created by Morningstar, a style box is designed to visually represent ...
Related Articles
  1. ETFs & Mutual Funds

    The Top 5 Large-Cap Core Mutual Funds for 2016

    Learn the benefits and risks of large-cap core investments, and discover the best large-cap core mutual funds to consider for 2016.
  2. Managing Wealth

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  3. ETFs & Mutual Funds

    A Guide To Core-Satellite Investing

    Find out how this approach reduces risk and costs so you can maximize your portfolio's return.
  4. Managing Wealth

    The Workings Of Equity Portfolio Management

    Achieve analytical efficiency by applying your evaluation to a key set of stocks.
  5. Managing Wealth

    Preparing For A Career As A Portfolio Manager

    Find out what it takes to win a spot in one of the most coveted financial careers.
  6. Trading

    Mutual Fund Style Drift Not Always A Bad Thing

    Style drift has a bad reputation, but it can be a sign that your fund is thriving.
  7. Managing Wealth

    In Praise Of Portfolio Simplicity

    Find out how you can streamline your investments for greater returns.
  8. ETFs & Mutual Funds

    10 Ways ETFs Can Grow Your Portfolio

    Implement the core/satellite approach used by money managers for better returns and lower risk.
  9. Financial Advisor

    What is Portfolio Management?

    Portfolio management is the act of maximizing the return on a portfolio. This is done with trading decisions made for the marketable securities in that portfolio. A portfolio manager, or a team ...
  10. ETFs & Mutual Funds

    NAESX,FSLCX: 3 Small-Cap Core Mutual Funds

    NSGRX,NAESX,FSLCX: Explore three small-cap core mutual funds and the reasons why they are are suitable as long-term holdings through bull and bear markets.
RELATED FAQS
  1. What is the difference between a blend fund and a balanced fund?

    As both "blend"and "balanced" describe the particular asset mix of mutual funds, determining the exact distinctions between ... Read Answer >>
  2. What is the difference between passive and active portfolio management?

    Understand the difference between active portfolio management and passive portfolio management, and how each strategy benefits ... Read Answer >>
  3. What percentage of a diversified portfolio should large cap stocks comprise?

    Learn more about achieving optimal diversification of an investment portfolio, and specifically about the percentage of large-cap ... Read Answer >>
  4. How are negative correlations used in risk management?

    Learn about risk management and how negative correlations between assets are used to diversify and hedge risk associated ... Read Answer >>
  5. Do mutual funds invest only in stocks?

    Discover which types of mutual funds invest in only equities, or stocks, and which mutual funds also include investments ... Read Answer >>
  6. Are mutual funds better than single stocks?

    Learn the advantages of investing in mutual funds over investing in individual stocks. These advantages include reduced risk ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center