Diversify, Diversify, Diversify

One of the main safety features of any investment, be it Pension Funds, ISAs or OEICS (Unit Trusts to us oldies) is the ability of the fund manager to diversify his or her portfolio.  Most Multi Asset Portfolios have this facility but that may not be the case with older style Funds where they were maybe, for example, all UK companies or all Japanese Companies or even With Profits in which case nobody knew.

A diversified portfolio should be able to invest in UK Equities,US Equities, European Equities, Asian ex Japan Equities, Japan Equities, Smaller Companies, Emerging Market Equities, Hedge Funds, Income Funds, UK Property, European Property, Fixed Interest (Gilts and Corporate Bonds), Convertibles, and the like etc.

Almost certainly however, in the case of Ethical Funds, the fund manager will probably give Gilts a miss, due to Government (the issuer of Gilts) raising money for defence projects.  Armaments is one of the things treated as non-ethical.

The mix of the above will also depend on how much risk the manager is aiming to take.  That’s why we carry out a risk profiling assessment to ensure your views are in line with the selected Portfolio.

If you think your funds are not well diversified, why not contact us and we can have a look and let you know a) is it’s diversified and b) if it matches your risk profile.  Our telephone number and our email address are well published on the website.