Lessons from the league table

Annual investment data from the past 13 years shows how a diversified portfolio can reduce risk, says David Brett, Schroders investment writer.


There is no guaranteed route to investment success but the data illustrates why you should not hold all your eggs in one basket. A widely held belief is that shares deliver the best returns in the very long term, at least among the main asset classes. The Barclays Equity Gilt study shows that over the past 116 years, UK equities delivered annual returns of 5pc; British government bonds, known as gilts, returned 1.3pc. But the story is more complicated. As the table shows, no one asset always rules the roost, underlining the importance of diversifying your portfolio. Here we explain the merits of diversification.

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