Company-specific risk
A portfolio concentrated in one company depends heavily on that company’s results and events.
Holding multiple businesses can reduce the impact of one company-specific problem.
Market risk remains
Broad economic or market shocks can affect many securities at the same time.
Diversification reduces concentration; it does not create a guarantee against losses.
Exposure matters more than count
Owning many securities that all depend on the same sector, country or factor can still leave a portfolio concentrated.
Look at what drives the holdings, not only how many there are.
General information only. Investment products can lose value, and terms, fees and regulation can change.