The challenge of diversification

Over the past few months, investors and their advisers have been treated to a rare sight - asset managers producing a genuinely interesting and useful array of new discretionary products.

These new funds attempt to solve a very real problem, namely the challenge of building a genuinely diversified, low-cost portfolio that invests across different asset classes. The boldest experimenters have been the passive brigade, with Vanguard, for instance, premiering its own multi-asset, low-cost portfolio, followed closely by even more adventurous types such as  New Frontiers Capital and Evercore Pan Asset. Yet this welcome burst of innovation comes at a difficult time for the part of the asset management business charged with building diversified portfolios – genuine diversificati...