Discretionary management

Discretionary management is a type of management that allows the manager to manage an individual portfolio or a fund based on their analyses and expectations.

The fund most often does not have a benchmark index, and the manager is free to vary the asset allocation between equities and bonds. Flexible management falls into this category. Flexible management provides minimum/maximum limits for asset allocation. These are set in advance: for example, between 50% (minimum) and 100% bonds, and between 0% (minimum) and 50% (maximum) equities. The manager reserves the right to adjust the portfolio based on their market analyses, within the established thresholds. This type of management yields very different results from one manager to another.