Series 24: 3.5.5.3. Diversification Of Funds

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