Thematic Portfolio Diversification


July 16, 2018 8:57 am

Interesting theory in the Investors Chronicle.

It argues that thematic portfolio diversity (investing across themes) can be just as, if not more, important during times of macroeconomic stress than regional diversification. The idea is that it dilutes the influence that GDP and other economic conditions can bare on a portfolio’s performance.

‘Between 2007 and 2010 the correlations between major equity markets, with the exception of Japan, ranged between 0.77 and 0.99’