Diversification of Funds
Management companies can be either diversified or non-diversified. Because most investors purchase funds to achieve diversification, judging whether a fund is properly diversified or not is important. Funds can be diversified in several ways:
- • They can diversify across asset classes (stocks versus bonds) or across industries (tech versus durable goods).
- • They can also diversify by holding the securities of many different issuers.
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