Norwich Union advises balanced portfolio

Norwich Union says financial advisers should encourage their clients to build a balanced portfolio rather than investing in a small number of funds or sectors, in order to spread risk more evenly.

Speaking at a "Diversification is a balancing act investment" seminar, Neil Davies, head of investment product development at Norwich Union, said: "no single investment can be a top performer all the time and in all economic environments. Combining different investments in a client's portfolio helps produce more stable returns over time," he advised

He said that investing in fixed interest and commercial property funds within a balanced portfolio can reduce volatility.

"Fixed interest investments can provide a steady income and commercial property also has the advantage that it does not follow the performance of the stock market and can produce steady returns when the stock market is falling, " he advised.