Why Portfolio Construction Matters (Second of a Series)

“What’s the key portfolio strategy managers should employ for success?”

“Diversify!” That’s how one top PM answered our question. There are many levels and measures of diversity. You don’t want to be stuck with large exposures in any one industry, no matter how resilient it may seem.

Healthcare, 20% of the US economy, is a broad category with multiple sub-sectors. But as investors discovered in 2020 (and during various times in the past decade), issues such as regulatory overhang associated reimbursement risk can be tricky to navigate or predict.