What are the best diversification strategies for uncertain markets? (Part II)

As managers continue to search for uncorrelated assets which are able to achieve 'true' diversification in difficult market conditions, managers tell Investment Week in this two-part feature their strategies for constructing the perfect multi-asset portfolio in 2016.

Click here for part one Toby Nangle, global co-head of asset allocation, Columbia Threadneedle Increased 'risky' assets Diversified portfolios should enjoy better risk-adjusted returns, and be less prone to severe shocks. In order to achieve diversification, fund managers talk about combining uncorrelated assets, but the thing about correlations is they are rather unstable and, as such, only obvious after the fact. In volatile markets, the price you pay for rents, coupons and dividends will tend to be much more volatile than the cashflows themselves. Retaining the ability to dy...