The diversification trap, and how to avoid it

Pension schemes often focus on maximising diversification within a scheme’s governance constraints. However, if this pursuit of diversification goes too far, at best this can lead to greater cost drag on returns but at worst this can lead to risk levels being significantly greater than planned. It is therefore important to correctly gauge the extent to which each of the assets and exposures in your portfolio contribute to overall risk.

Read full briefing note here