The Healthy Investment With-profits Fund invests in a mix of different investment assets including UK and global stocks and shares, fixed interest government and corporate bonds, commercial property and cash deposits.

Diversification reduces risk by allocating investments across various financial assets, and industries. The objective of a diversified portfolio is to optimise returns by investing in different financial sectors, each of which react differently to the same market event.

Although it doesn’t guarantee against loss, diversification is an important element of reaching long term financial goals whilst minimising the level of risk.

Balancing a portfolio is quite complicated and potentially more expensive if arranged by direct individual investment and may come with lower rewards because the risk is mitigated.

Different assets such as bonds and stocks don’t usually react in the same way to adverse events. A combination of both reduces the sensitivity of a portfolio to market swings because they move in opposite directions. So by diversifying, adverse movements in one may be offset by positive results in another.

Diversification by location may also be beneficial. Market volatility is USA may not affect investments in the UK and Europe so investing across different locations may minimise and offset the risks of all investments being at home.

Our appointed investment managers ensure that the components of the With-profits Fund are sufficiently diversified to represent a cautious approach to investing our members’ savings and investments.