The core plus investment strategy refers to a type of portfolio management that combines core holdings like stocks and bonds with additional alternative asset classes. This strategy aims to provide stability through the core holdings while also pursuing higher returns through the plus investments. In this article, we will provide an overview of core plus investing, including potential plus assets, implementation approaches, and risks to consider when using this strategy.
Defining the core holdings in a core plus portfolio
The core holdings in a core plus portfolio typically include mainstream assets like stocks and investment-grade bonds. For stocks this may mean a broad market index fund, and for bonds it could be a diversified aggregate or government bond fund…
Common ‘plus’ components to complement the core
While the core forms the foundation, the plus components provide an opportunity to enhance returns or diversify sources of risk and return…
In summary, core plus investing incorporates non-traditional asset classes as a supplement to a portfolio of stocks and bonds. When implemented appropriately, this can enhance returns while also providing more diversification. However, the plus components also introduce additional risks that should be considered.