What is Maximum Diversification®?
Maximum Diversification® maximises a Diversification Ratio without forecasting expected returns, aiming for a more balanced risk contribution across effective bets than market-cap benchmarks.
The problem it addresses
Capitalisation-weighted indices concentrate risk in a few mega-caps and correlated themes. Allocators seeking a true equity core often need a process that diversifies risk contributions rather than chasing forecasts.
How TOBAM implements it
TOBAM constructs long-only portfolios that maximise a Diversification Ratio under investability constraints. The process is patented in jurisdictions including the US, Japan, Australia and Canada, and underpins open-ended funds and related indices administered by TOBAM as an EU benchmark administrator.
Who it is for
Institutional and professional investors evaluating diversified equity cores, anti-benchmark / Smart Beta replacements, or complements to market-cap beta. Availability depends on jurisdiction and investor status.
Take the next step
Talk with the TOBAM team, or invest online when the share class is available on TOBAMDirect.