Financial Jargon Buster Dictionary
This glossary is provided for information only and is not regulated by the Financial Services Authority.
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Optimised Portfolios
The various optimised portfolios have been designed to be appropriate for investors with a certain attitude to risk and for specified investment periods. These portfolios were derived using an adapted version of the standard efficient frontier methodology and Tillinghast Towers Perrin's Global CAP:Link asset model. Certain marketing and reasonableness constraints were placed on the resulting portfolios, e.g. the extent of overseas holdings was limited to be in line with market practice and assets with very similar characteristics were combined. The portfolios will therefore not necessarily be on the theoretical efficient frontier. However, given the difficulty in predicting future experience, this is unlikely to be significant and is likely to be outweighed by the benefit of having a more stable and widely accepted asset allocation.
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