Three ways to diversify your portfolio

Professional investors Ian Barrass, James de Bunsen, and Peter Webster of the Henderson Alternative Strategies Trust pick three funds to help you diversify your portfolio.

Each week, professional investors tell us where they'd put their money. This week: Ian Barrass, James de Bunsen, and Peter Webster of the Henderson Alternative Strategies Trust

Investors have enjoyed handsome stockmarket returns since the financial crisis. Since the end of February 2009 the FTSE All Share has returned 185.9%, at an annualised rate of 12.7%. We feel that the backdrop for equity markets is now becoming less favourable. Valuations have re-rated the All Share now trades on a forward price/earnings ratio of 14.4 times, compared with 8.6 times in February 2009. Central banks are slowly removing monetary support. The Federal Reserve forecasts three more interest-rate rises in 2018 and has begun to shrink its balance sheet; the European Central bank is tapering asset purchases and the Bank of England recently raised rates for the first time since 2007. Tight labour markets suggest that a rise in inflation also shouldn't be a surprise.

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MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.