Are concentrated portfolios good or bad?

We look at the risks and rewards from investing in portfolios with 50 holdings or less
One of the advantages of buying a fund like an investment trust is that it offers a diversified exposure, but recent analysis suggests a large number of managers like to maintain a relatively concentrated portfolio. A concentrated approach is likely to lead to more volatile returns relative to the benchmark, especially over shorter time periods. This is because these types of funds typically have a higher ‘active share’, which...

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Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.

The Shares team
Disclaimer

The value of your investments can go down as well as up and you may get back less than you originally invested. We don't offer advice, so it's important you understand the risks, if you're unsure please consult a suitably qualified financial adviser. Tax treatment depends on your individual circumstances and rules may change. Past performance is not a guide to future performance and some investments need to be held for the long term.