How Many Shares Do You Need for a Diversified Portfolio?

Investing through a fund, even just one, gives you instant portfolio diversification. How can you achieve this if you prefer to DIY stock pick?

Holly Black 22 February, 2019 | 8:22AM

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Investing in a fund gives you immediate diversification, but those who prefer picking shares for themselves expose themselves to a greater risk of capital loss.

Investment funds usually have at around 50 different holdings and often upwards of 100 – unless the manager is running a particularly concentrated portfolio. Investing through a fund, even just one, gives you an element of capital protection because it is unlikely that all of the different stocks within its portfolio will rise and fall at the same time.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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