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Segregated Portfolio

   

Definition: a Segregated Portfolio is a mechanism used by mutual funds to protect the interests of all investors in case of a credit event, and also to deal with liquidity risk.
The main objective of a segregated portfolio is to handle defaulted bonds in the portfolio separately so that the original scheme is not greatly affected by stopping investors from buying at low price to take advantage of the price appreciation a little later after the default dues are cleared.


   
   
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Learn more about Segregated Portfolios.



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