With over 3,500 equity mutual funds and ETFs available, it may seem easy to build a diversified portfolio. But is that really the case? When you consider how many of these funds hold major companies like Microsoft, Apple, and Nvidia, you’ll discover over half of them do, leading to significant concentration risk.
Even with different managers or funds, true diversification can be elusive. At Redwood, our key value is not only managing the exposures within our individual sub-strategies but also within our overall models to reduce overlap and mitigate concentration risk.
Diversified or Just Duplicated?
- We believe the preservation of capital is key to consistent, long-term investment success.
- Our investment approach is grounded in economic theory and backed by quantitative analysis.
- Managing drawdown risk is a pillar from which we build our portfolios.
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