Why investors need to diversify away from 'branded' mainstream funds

Claire Madden, partner at Connection Capital, believes a 'radical' new approach is required to move investors away from large 'branded' funds and towards smaller and more esoteric funds

For most private investors, investing in funds usually means only one thing: traditional equity funds run by large fund managers. This approach is often seen as the 'safe' option, and often it is also generally the only option. But are investors’ interests being well served by managers always sticking so closely to the mainstream? Portfolio diversification may be a core tenet of investment strategy but in reality it can be hard to achieve. The tendency to recommend larger, well established mainstream funds rather than smaller ones to investors has very little to do with performance, as t...