What’s the evidence about diversification in your 'evidence-based' tracker?

Passive funds have a clear philosophy based on market capitalisation and replicating the performance of indices or benchmarks. This is sometimes called “evidence-based” and seems often thought of as highly diversified - maybe largely because a large number of securities are held. But, the evidence currently suggests a passive equity fund might be giving people very significant exposure to a small number of stocks. As a proudly independent firm we asked W1M, a leading investment house - “Where is the evidence in diversification?”

Read the W1M article here.