Why is portfolio diversification still vital?

clock

Quilter's Chris Beckett on why diversification should be at the forefront of advisers' minds when constructing client portfolios.

During the recent market downturn, many investors learnt the hard way that it is impossible to diversify away the risk in a portfolio completely. The lesson was made worse by the fact that, as virtually all financial assets declined in unison, effectiveness of diversification declined just when investors most needed its benefits. However, while diversification may not be perfect, it still has a vital role to play in the construction of an effective portfolio. It is our role as investment managers to ensure that clients understand the limitations of diversification and the risks that rema...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

CII publishes vulnerability data guidance for firms

CII publishes vulnerability data guidance for firms

Consumer Duty and GDPR

Cameron Roberts
clock 19 June 2026 • 2 min read
Baillie Gifford rolls out Sharia-compliant fund amid 'strong' demand

Baillie Gifford rolls out Sharia-compliant fund amid 'strong' demand

Follows engagement with Islamic finance scholars

Sophia Panayi
clock 18 June 2026 • 2 min read
Charging deceased clients accidentally 'more common' than advice profession would like

Charging deceased clients accidentally 'more common' than advice profession would like

‘The fee outlives the service because the records do not talk to each other’

Sophia Panayi
clock 18 June 2026 • 4 min read