Diversification — once described by Nobel Prize winner Harry Markowitz as the “only free lunch” in investment — failed to boost risk-adjusted returns. Diversification is a good way of spreading exposures to boost risk-adjusted returns over long periods of time. While circumstances have worked against this approach for much of the past decade, the benefits of diversification are reasserting themselves.

"The relative weakness of the European economy compared with the US over the past decade has been in no doubt. The lack of European exposure to tech and issues related to high energy prices were well-understood."

The German stock market performance has been even more striking. So far in 2025, the Dax 40 index is seeing the second-best start of the year since German reunification, rising 13 per cent in euro terms and 15 per cent in dollar terms.