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Diversification - are you doing it right?

Most investors understand the principle that diversification reduces risk and potentially improves returns in a well-constructed investment portfolio. Yet when the whole of Asia ex-Japan represents approximately 2% of the MSCI World Index (according to MSCI data as at June 2018), are they really getting access to the opportunities they’re looking for?

Most investors understand the principle that diversification reduces risk and potentially improves returns in a well-constructed investment portfolio. Yet when the whole of Asia ex-Japan represents approximately 2% of the MSCI World Index (according to MSCI data as at June 2018), are they really getting access to the opportunities they’re looking for?

In the latest episode of Your Wealth, Gemma Dale talks to Blackrock’s Blair Hannon about the world of opportunities available to investors, and how to avoid some of the pitfalls, including:

  • Sector concentration risks in the domestic market,
  • How and why diversification can help protect your portfolio,
  • What you are really buying when you invest in an index tracking product, and 
  • How to access opportunities that are not yet well represented in the major indices.