C
   
   Contingent Immunization
   















 

C

Contingent Immunization

A fixed-income portfolio management technique that has some characteristics in common with portfolio insurance in equity markets. The manager of a contingently immunized portfolio may have considerable flexibility in the yield and duration of the positions used in the portfolio as long as the positions perform well relative to the associated liability. If the portfolio performs poorly, the manager will move to a portfolio that matches (immunizes) the duration and return requirements of the liabilities. The shift to the immunized portfolio is total and irrevocable as opposed to portfolio insurance strategies in which the manager continually shifts funds between risky and riskless assets.

Glossary * C