Portfolio Investment

The acquisition of foreign financial assets that results in less than a 10% ownership share in the entity. Portfolio investment is investment made by investors who are not particularly interested in involvement in the management of a company.

Portfolio investment can be explained through an example of an American businessman investing in stocks on the Tokyo Stock Exchange which result in a 6% ownership share. The businessman is more passive in his investment. He is not going out of his way to start up a company or expand a company into the country. He is simply investing in a company that already exists.