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  • Market: New Zealand
  • Sector: Equity Strategy
30 April 2021

Portfolio Diversification: Unpacking the Free Lunch

Matt Henry
Matt Henry, CFA
+64 9 368 0115
Matt Noland
Matt Noland, CFA
+64 9 368 0134
 

Portfolio diversification is a core principle of long-term investing and has been called the only free lunch in finance. What does that mean?

The primary goal of diversification is not higher returns, but to minimise the risk and volatility (the free lunch) of a portfolio for a given long-term expected return. We unpack why diversification is one of the key tools in an investor’s toolbox. 


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