3.5.5.3. 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