Diversification order of the day for advisers

Diversification order of the day for advisers

Post Brexit-vote, investors have been putting money into well-diversified portfolios to mitigate concentration risk, advisers have claimed.

Over the past year, investors have been avoiding high concentrations in any one market, geographical region or asset class, particularly after the market shocks in the immediate aftermath of the Brexit vote on 23 June.

 

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According to Colin Beveridge, chief investment officer for True Potential Investments, investors have put £1bn into some of the most diversified portfolios on its platform during the past 12 months.

He said: "This makes great sense to clients and they see the value very quickly. They can understand that no single strategy across all periods is perfect. 

His comments came as a poll carried out by FTAdviser Advantage found opinion was divided equally among advisers as to whether or not to diversify away from the UK or add more money to the UK at the moment.

The poll found 33 per cent of advisers believe it is vital to "always diversify", although 34 per cent believed it was important to retrench at the moment and avoid certain markets which might cause some short-term but sharp shocks.

The discretionary-managed True Potential Portfolios were launched in October 2015.

Fund managers within the portfolio series include True Potential Investments, UBS, Goldman Sachs, Allianz Global Investors, Schroders, SEI, 7IM, Close Brothers Asset Management and Columbia Threadneedle.