modern portfolio theory

American  

[mod-ern pawrt-foh-lee-oh thee-uh-ree, theer-ee] / ˈmɒd ərn pɔrtˈfoʊ liˌoʊ ˌθi ə ri, ˌθɪər i /

noun

Finance.

1. a mathematical system for calculating and analyzing the expected returns on assets in order to assemble a portfolio of maximum efficiency, as used in the Markowitz model. MPT

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Etymology

Origin of modern portfolio theory

Introduced in 1952 by U.S. economist Harry M. Markowitz ( def. )

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Example Sentences

See Examples For:

modern portfolio theory

That was the birth of modern portfolio theory, now a common strategy in any financial planner’s toolbox.

From Salon ● Apr. 26, 2025

Furthermore, using the principles of modern portfolio theory, Morgan Stanley has calculated that an emerging market allocation of 27 percent in a global stock portfolio produces the best balance between risk and return.

From New York Times ● Dec. 17, 2021

These platforms use algorithms and modern portfolio theory to create portfolios based on investors goals.

From US News ● Sep. 16, 2016

His Anchorage-based McKinley Capital Management oversees more than $7 billion in assets and uses the classic idea of modern portfolio theory to estimate future risk and returns.

From Forbes ● Apr. 29, 2015

Plus, he adds, it doesn’t help an investor adhere to modern portfolio theory, which focuses on diversification and balancing expected risk with return.

From Washington Post ● Mar. 21, 2014

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