Portfolio investment
In economics and finance, Portfolio investment represents passive holdings of securities such as foreign stocks, bonds, or other financial assets, none of which entails active management or control of the securities' issuer by the investor; where such control exists, it is known as foreign direct investment.
Portfolio investment is strictly connected with a portfolio diversification process.
Some examples of Portfolio investment are:
- purchase of shares in a foreign company.
- purchase of bonds issued by a foreign government.
- acquisition of assets in a foreign country.
Portfolio investment is part of the capital account on the balance of payments statistics.