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Glossary

Diversification

Diversification means spreading investments across different assets, sectors, tenants and locations so that a problem in one area has a smaller effect on the whole. It reduces some risks but does not remove them.

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Short answerDiversification means spreading investments across different assets, sectors, tenants and locations so that a problem in one area has a smaller effect on the whole. It reduces some risks but does not remove them.

Diversification is the practice of spreading money across different investments so that no single one decides the overall result.

What can be spread

A property fund can diversify across several buildings, property types, tenants, cities or countries. An investor can also diversify across different products, not only inside one fund.

Why it matters

If one tenant leaves or one market weakens, a varied portfolio absorbs the shock better than a concentrated one. Diversification has limits. Assets can fall together in a general downturn, and a fund that looks broad may still depend on a few large holdings. Check what a fund actually holds, and consider how much of your total savings any single product represents.

General information. Not investment advice or a suitability assessment.

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