The “New Diversification” is a phrase coined by BlackRock in acknowledgment of the fact that traditional definitions of diversification have their shortcomings—a hard lesson borne out in the 2008 credit crisis. Now, more than seven years on, this evolved form of diversification remains as important as ever. Dr. Christopher Geczy offers his views on why widening your sources of risk and return is always a prudent approach—in good times and in bad.

"Investors cannot necessarily rely on what is traditionally thought of as diversification to meet their long-term goals."


  • Many investors did not have exposure to enough different asset classes during the most recent crisis, resulting in limited protection from downside risk. Many very likely remain underdiversified today.
  • Investors should consider incorporating a much wider range of strategies and assets as part of their core investment strategy.
  • The notion of "alternative" investing is often misunderstood. Gaining access to different types of investments is an approach that almost everyone should employ, and many strategies are now available to a broad range of individuals.

Please consider the investment objectives, risks, charges and expenses of each fund carefully before investing. The funds prospectuses and, if available, the summary prospectuses contain this and other information about the funds and are available, along with information on other BlackRock funds, by calling 800-882-0052. The prospectus and, if available, the summary prospectuses should be read carefully before investing.

Diversification and asset allocation may not protect against market risk or loss of principal.

The opinions presented are those of Dr. Christopher Geczy as of August 2015, are not necessarily those of BlackRock or The Wharton School, and may change as subsequent conditions vary. Individual portfolio managers for BlackRock may have opinions and/or make investment decisions that, in certain respects, may not be consistent with the information contained in this report. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily allinclusive and are not guaranteed as to accuracy. Past performance does not guarantee future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are often heightened for investments in emerging/developing markets or smaller capital markets.

Incorporating alternative investments into a portfolio presents the opportunity for significant losses. Also, some alternative investments have experienced periods of extreme volatility and in general, are not suitable for all investors.

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Prepared by BlackRock Investments, LLC, member FINRA

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