What are the key ways to diversify a portfolio? And why might investors wish to do this in the first place?
Diversification by region, asset class and currency is a simple, structural way to help avoid extreme, poor outcomes. So it’s surprising how often these potential easy wins aren’t taken. For example, we regularly see very high allocations to US or UK assets in multi-asset funds while allocations to alternative assets like high yield, emerging market debt and infrastructure are often limited.