Is my portfolio diversified enough?

Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest. 

Let’s talk risk and reward

But before you decide which assets to hold in your portfolio, you need to understand that different asset classes carry different levels of risk. 

Individual equities (or shares) are at the higher end of the risk spectrum. This is because you’re essentially only investing in one company. So, any gains or losses you make are reliant on that one company’s performance. Cash funds, on the other hand, carry lower risk. They also carry lower potential returns. 

When it comes to picking what to put in your own portfolio, you’ll need to consider both the way you feel about risk and the time horizon you’ve earmarked for achieving your financial goals. This will help you decide which assets to invest in and how much you’ll invest in each.

The idea is that you choose a mix of investments (aka build a well-diversified portfolio) that you hope will meet your goals over the long term. If you then stay invested when markets wobble - as they so often do - your balanced portfolio will help to minimise the impact of any single asset type loss. It may even help take advantage of opportunities.

How do I know if my portfolio is diversified?

If you’re already investing with us, you can simply log in to your account and click on ‘Accounts holdings report’ under ‘Quick actions’ in your account summary. This shows where in the world you’re invested, which assets you’re investing in and how your money’s performing. If you’re not investing with Fidelity, you can find out how to open an account and save tax-efficiently here.

How can I build a diversified portfolio on my own? 

Funds are a great way to start building a diversified portfolio, as they’re created by investment expects who carefully select the assets that should go in the fund to meet its investment objective. So, they already hold a  mix of investments. Think about holding funds from different regions and asset classes to diversify your portfolio even further. 

Here are a couple of ways to help you choose a fund. 

Select 50 - This is a list of our favourite funds, selected by experts. The list contains active and passive funds, investment trusts and exchange-traded funds (ETFs). You can view the Select 50 list here. 

Navigator - this tool will pick a diversified fund for you that’s managed by our experts, based on the level of risk that you’re comfortable with. You can learn more about Navigator here. 

Can someone help me diversify my portfolio?

Absolutely, our financial advisers can help you with this. We find that customers turn to financial advice when there’s change afoot - be that personal, or when the markets aren’t behaving as they’d like. Our financial advisers can provide you with a personal financial recommendation, if that’s something you’re interested in. You can find out more about financial advice here.