Properties of a well defined asset class

CFA Level III Portfolio Management
#1

There are 5 properties of an asset class. I understood 3/5

The other 2 I don’t quite get what they really mean:

  1. Asset classes selected for investment should have the capacity to absorb a meaningful proportion of an investor’s portfolio.

    1. The asset classes as a group should make up a preponderance of world investable wealth.

What does it really mean?

#2

The first one simply means that this investor isn’t going to affect prices (and, therefore, returns) on an asset class by buying or selling a ton of it.

The second one simply means that there aren’t many assets that aren’t classified in any asset class.

1 Like
#3

so first one is related to liquidity

#4

Yes.