Portfolio with a recent actual pattern of short-term profit-taking

[From Guidance on implementing IFRS 9 Financial Instruments]

Definition of held for trading

The definition of a financial asset or financial liability held for trading states that ‘a financial asset or financial liability is classified as held for trading if it is … part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking’. What is a ‘portfolio’ for the purposes of applying this definition?

Although the term ‘portfolio’ is not explicitly defined in IFRS 9, the context in which it is used suggests that a portfolio is a group of financial assets or financial liabilities that are managed as part of that group (Appendix A of IFRS 9). If there is evidence of a recent actual pattern of short-term profit-taking on financial instruments included in such a portfolio, those financial instruments qualify as held for trading even though an individual financial instrument may in fact be held for a longer period of time.