Returns of the magnificent seven

asset allocation

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Fund managers under constant pressure to produce results would do well to put into action a Nobel Prize-winning theory that diversifies investment over seven non-correlated asset classes

When fund management houses talk about diversification, it begs the question as to how varied their share choices are. Is having a basket of UK, US, European and Far East shares real diversification? After all, they are all one asset class - equities. So if the world's markets suffer, so does the investor, admittedly to a greater or lesser degree depending on the market. True diversification is actually having investments in different asset classes - not some misplaced marketing speak. The fund management industry could be compared to the star culture the British public enjoys today. Whe...

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