Diversification: key to riding out rocky markets

It’s easy to forget the benefits of diversification. Investors who dived headlong into equities and corporate bonds in 2012 will have done well, but in a more volatile 2015 your clients could struggle if they refuse (or fail) to diversify.

Power of diversification

  • Diversifying a portfolio can smooth returns and help protect capital
  • It can mitigate the effects of downturns while capturing potential upside

Because of the tendency of alternative investments to behave differently than stocks and bonds, adding them to your portfolio can offer scope for broader diversification and the potential to reduce risk while also enhancing returns.

While alternatives don’t eliminate risk from a portfolio, they can offer an efficient way to help reduce the effects of particular risks and pinpoint specific outcomes.

The BlackRock Global Multi Asset Income Fund flexibly captures income potential across asset classes. Even though the fund cannot totally eliminate risks, the BGF Global Multi-Asset Income Fund has delivered an average annual yield of 5.5%1.

1 Based on performance of the (BGF) Global Multi-Asset Fund, a $2.8bn Luxembourg-domiciled UCITs fund. The fund was launched on 28 June 2012. Average of all A6 share class monthly dividends annualised since the fund’s inception. Over time the target rate is subject to change. All data sourced from Bloomberg, from 1 November 2013 to 30 June 2015. Based on Bloomberg 30-day volatility calculations of accumulating share classes net of fees (BGF Global Multi-Asset Income Fund: A2 USD). Balanced portfolio comprises: 50% equities (MSCI World) and 50% global bonds (Barclays Capital Global Aggregate Bond Index USD Hedged).

Your hunt for smart diversification stops here

BGF Global Multi-Asset Income Fund

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