Show Notes
”Conventional wisdom will tell you that the lowest risk portfolio you can have is to have 70% of your assets in one country…that's a violation of common sense.”
Ben Preston Portfolio Manager at Orbis Investments, warns that in markets dominated by a handful of mega-caps, portfolios that look diversified on the surface- may be carrying far more risk than advisors realise.
We sat down with Ben to unpack where diversification breaks down and find out how advisors can better identify this hidden concentration risk.
In this episode, you’ll learn: How benchmark alignment can increase portfolio risk in narrow markets. Why historical bubbles reveal the dangers of perceived diversification. Practical ways to assess diversification across geographies, styles, and currencies.
Chapters: 00:00:00 – Rethinking Portfolio Diversification Risk 00:05:45 – Understanding Today’s Narrow Market 00:09:01 – Benchmarking And Concentration Exposure 00:14:15 – Defining Diversification Across Scenarios 00:18:52 – Broadening AI Exposure Beyond The US 00:22:11 – Currency Management As A Portfolio Input
📈 Stocks and ETFs Mentioned: NVIDIA, META, SK Hynix Inc. SK Square Co. Ltd, ASML. TSMC, Alphabet, Next Plc, PDD Holdings.
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CPD Points: This episode is accredited for the following CPD points by the Financial Advice Association of Australia (FAAA). Complete the quiz here to claim your points.
0.5 Total Hours Knowledge Requirements: Managed Investments (0.50 hour) Legislated CPD Area: Technical Competence (0.50 hour)
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This episode has been sponsored by Orbis Investments.
If you would like to learn more about Orbis’ contrarian investment approach can offer a true point of diversification when constructing client portfolios, click here.
Thank you to Orbis for helping us keep all of our content free and accessible.
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