Trustnet Magazine Issue 21 September 2016 | Page 11

/ TRACKERS / Investment author Lars Kroijer has estimated that difference to be the equivalent of around seven Porsches equity fund to contain bonds and cash. Often an active manager will take more risk by tilting towards small companies, or play safe by focusing on large caps. And remember, your fund’s investment style can drift over time. Without realising it, your portfolio of active funds could in fact be rather riskier than it was when you started investing. 3 THEY’RE THE ULTIMATE DIVERSIFIER The benefits of diversification in both the growth phase and the consolidation phase of saving for retirement have been proved beyond doubt. Not only does staying diversified reduce your exposure to certain types of risk, it can also help you to generate higher returns, especially over long periods of time. Of course, the most important thing is to spread you