Derivative holdings
In portfolio management, derivatives, which are financial instruments tied to assets like stocks or commodities, are either categorized as holds or doesn't hold.
Portfolios that hold derivatives engage in risk management and market diversity, leveraging these instruments as hedges against market fluctuations. However, this choice introduces greater complexity and heightened risk due to the leveraged nature of derivatives.
On the other hand, portfolios that doesn't hold derivatives aim for a simpler investment approach. By avoiding derivatives, they bypass the additional risks and complexities, often adhering to specific investment mandates or regulatory constraints that restrict the use of such financial instruments.