How to diversify portfolios successfully

Daniel Blamont, Head of Investment Strategy at Phoenix Group, discusses the best strategies to diversify investment portfolios.

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What should you be looking at when it comes to portfolio diversification?

Insurance Investor: How much more time, or not, are you spending on asset allocation decisions these days?

Daniel Blamont: My role is titled head of investment strategy, though I have always, even in previous positions, spent time on investment strategy and diversification.

We know that the market’s quote is that, ‘diversification is the only free lunch’ and so obviously it is continually worth looking at.

"To achieve diversification, you need to make substantial efforts
in some cases."

From my point of view, and from more of an annuity angle, diversification is key. If you just go into a portfolio of corporate bonds and gilts, you don’t have diversification, so it is quite hard to achieve it within just one broad asset class.

This excerpt is taken from a roundtable: ‘What strategies are proving successful in driving returns from an asset allocation strategy and achieving diversification at the lowest capital cost?.’

You can read the full roundtable in the research report Insurance Asset Management – Europe 2019, which can be downloaded here.