The financial crisis has highlighted the need for a truly diversified portfolio, says Brian Fleming, head of multi-asset risk and structuring at Standard Life Investments.
Financial crises have a painful way of reminding investors that it is not easy to construct a diversified portfolio that offers protection during turbulent market conditions. While no universally agreed measure of diversification exists, we believe portfolio diversification should be considered in two broad parts. The first part understands the diversification within a particular investment portfolio, with which we are most familiar. The second considers the diversification potential available within the investment universe chosen for that portfolio. Clearly the two are not the same: inv...
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