How does diversification help reduce risk?
Diversification is achieved by spreading your investment across different asset classes and investments in order to reduce risk. Diversifying your investment across a broad range of asset classes may smooth returns while still providing the opportunity for capital growth. An easy way to achieve diversification is to invest in multi-sector managed investments, where you gain exposure to a range of securities in different asset classes. Your adviser will be able to recommend an investment strategy to suit your goals and risk tolerance.
The diversity of assets within a managed investment generally helps to reduce risk and produce more consistent returns than investing directly into a single asset. Before placing any managed investment orders you should read the relevant PDS and other disclosure documents which must be provided by your adviser.
