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   Covariance Assets
   















 

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Covariance Assets

Categories of investments added to a portfolio because their returns are not highly correlated with returns on the domestic stocks and bonds which are the fund's principle holdings. These low covariance assets may not improve average returns, but they reduce return variation and, consequently, often increase compound returns. Examples of covariance assets might include real estate, foreign stocks and bonds, and gold mining shares. See also Variance Drain.

Glossary * C