Diversification: the longer you wait, the more likely you get what you expect

Pendal Group

Pendal Group

Diversification: the longer you wait, the more likely you get what you expect. Financial theory suggests that more risk should be rewarded with more return. Otherwise, why bother taking more risk? As theories go, that's one of the most basic. So how did our conservative fund deliver the same return as an aggressive one when they take distinctly different amounts of risk? The problem is one of time and not theory. A horticultural analogy might help here... It is often overlooked that investment portfolios (like seeds) need time to germinate and grow into something worth harvesting. In some years the 'crop' will be ravaged by storms and in others, blessed with perfect weather. Over the short term, there can be a great deal of variance between plants (or portfolios). However, over the long term, the differences are far less stark. Our advice is resolute: choose your strategy well and then give it the time it needs to work. More on investing from Head of Diversified Strategies Martyn Wild here (VIEW LINK)


At Pendal Group, our vision is to combine the benefits of our strong institutional foundation and performance-focused culture with a multi-boutique specialist investment approach. We believe this approach firmly positions Pendal to achieve...

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