Comparison of 2 Portfolios: Undiversified and Diversified Among Industries of Kazakhstan.
II. Literature Review. Investment portfolios may vary from company to company, from manager to manager. Their content and structure may differ depending on the wealth, strategy, and risk attitude of the holder. However, any portfolio needs proper management and competitive treatment in order to meet certain expectations in terms of return and risk. In fact, diversification is the key to the management of portfolio risk because it allows investors to significantly lower portfolio risk without adversely affecting return. While the return on a diversified portfolio may be equal to the average investment in the portfolio, the volatility will be less. This is why a diversified multi-industry mutual fund is less volatile than a single industry fund or one that is highly segmented, like a small-cap fund (Reier, 2004). In order to reduce the risk of the portfolio companies try to diversify it by allocating securities in it by portions. Portfolio may comprise different securities such as stocks, bonds, treasury notes, currency and even commodities. Some investment managers prefer to invest in bonds. Corporate bonds are debt