Advisers have been warned to diversify in 2020 as volatility is expected to continue.
Ian Heslop, the head of global equities at Merian Global Investors, said one of the reasons to seek diversification was the rotation between the value and growth style of investing seen late last year.
Value stocks have underperformed growth stocks for several years but they staged a strong rally towards the end of 2019.
Mr Heslop said: "Unfortunately for investors, many funds lack diversification between investment styles. This may be because their managers are value investors, believing that the market sometimes prices stocks below their intrinsic value; or they may be growth investors, with their eyes on the exciting future prospects of innovative, fast-growing companies.
"In the real world, neither investment style has a monopoly on truth. We believe in flexing our portfolios between different investment styles, including value and growth. We also closely analyse and use quality (companies with strong balance sheets), momentum (stocks that have market support), and other factors.
"In 2020, in my view, successful investors will be those who exhibit flexibility and stability."
Mr Heslop's own flagship fund, the Merian Global Equity Absolute Return strategy, has had a dire 2019, losing more than 12 per cent year to date.
The manager helps oversee several funds for Merian, with another mainstay being the £2.6bn Merian North American Equity fund.
Over the past three years this fund has also lagged, albeit to a lesser extent than the absolute return fund. It has returned 32 per cent compared to 36.5 per cent for its sector, IA North America.
Mr Heslop said of the need for diversification: "We know from engineering, and from common sense, that a stable structure has multiple points of support, rather than just one. That is why a chair has four legs.
"Most people would not risk sitting on a chair that had only one leg. Investment is not all that different. A stable fund is one that is diversified between several distinct sources of performance, and does not rely on just one."
Over the past five years, the MSCI World Value index has underperformed the MSCI World index, returning 6.2 per cent.
Meanwhile the MSCI World Growth index has outperformed over that period, returning 10.5 per cent.
But over the past three months this pattern has been reversed, with growth underperforming and value outperforming.
Mr Heslop said: "In the real world, forecasts of the economy and markets are highly fallible. This has always been the case, but it was especially evident in 2019, which was, in many ways, a year of uncertainty.
"Politics is likely to continue to have a big impact on markets in 2020, especially in view of the impeachment process in the US, and in the run up to the presidential election on November 3. Looking deeper, the equities market in 2019 was characterised by instability and sharp changes in investors’ risk appetite and sentiment."