William Beverley, head of macro research at Iveagh, presents his evidence against the belief that increased returns simply rely on a number of negatively correlating assets...
The advantages of multi-asset investing are well known: increased investment opportunities through multiple sources of alpha, dynamic asset allocation and increased portfolio efficiency (reduced volatility) from diversification. Markowitz's trailblazing analysis in 1952 showed that, under certain assumptions, it is a mathematical certainty that increasing the number of negatively correlating assets in a portfolio increases risk-adjusted returns. In addition, diversifying reduces risks unrelated to volatility; for instance, illiquidity risk or capital loss. In practice, diversification...
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