This feature is available in Enterprise and Ultimate editions.
In addition to portfolio items, you can also add and manage the following types of items in the Portfolio Tree:
Child Portfolio Items
Nest portfolio items to create a multi-level portfolio tree that contains finer levels of detail.
Create leaf-level hierarchies of work initiatives for delivering new functionality.
Use portfolio items to group related defects with new functionality to be delivered, or to organize and group a set of defects to be addressed together.
Group related test sets under a portfolio item to target specific regression testing activity that should be done as new functionality is being delivered.
See Designing Your Project Hierarchy for details.