A diverse portfolio is ideal, but it can take too much time, effort and worry. Experts show how to nurture that nest egg DIVERSIFYING investments or simply not putting all one's financial eggs into one basket is one of the most often repeated investment axioms. However, choosing from the wealth of different asset classes is not an easy task for the untrained investor, and investing directly into equities usually takes a lot of time. Katherine Cheung, Merrill Lynch director and head of regional marketing and Hong Kong distribution business, said investors in the region were taking managing their wealth - including focusing on risk levels and returns - seriously. However, they may not have the time to select the best asset allocations to satisfy their financial goals. Investors may also be tempted to invest in one sector or country exposing their assets to unforeseen risk. In addition, many investors are put off the idea of investing overseas because it involves a lot of homework to develop a diversified investment strategy and distance makes researching the options more difficult. They also have to take into account factors that may affect a specific country or a region. Ms Cheung said investors looking for a relatively simple means of creating a diverse portfolio could opt for a global investment fund that took care of not only stock selection, but asset allocation decisions as well. One such product is the Merrill Lynch MLIIF Global Allocation Fund. Managed by a team with a recognised track record, the MLIIF Global Allocation Fund is structured to alleviate the problems faced by a single investor looking to establish a diversified investment portfolio. Under fund director Dennis Stattman and Dan Chamby, who is in charge of running the fund, it aims to diversify risks and gain return by investing in different geographic locations and uncorrelated sectors. The fund follows a value-aware approach aiming to incrementally amass value over time, while preserving capital during bear market phases. To achieve its goals the fund invests in a large number of small highly diversified uncorrelated securities including equities, bonds and cash equivalent investment instruments. The fund usually holds more than 500 securities. Top-down and bottom-up strategies are also used through various financial instruments. Ms Cheung said investing this way was not easy. It is generally well beyond the capabilities of individual investors. 'The MLIIF Global Allocation Fund allows investors a relatively simple means of creating a diverse portfolio - with all the expert financial oversight a qualified fund manager and his team can offer,' Ms Cheung said. With the fund manager making the decisions, investors avoid worrying about the choice of asset class and ever-changing market conditions. In spite of rising oil prices, political upheaval and fluctuating stock markets, the allocation strategy has remained significantly unchanged for the past 12 months. The fund now holds 56 per cent in equities, 17 per cent in bonds and 27 per cent in currency/short-term bonds (with a maturity of less than one year). Ms Cheung said that as the MLIIF global fund name suggests, investments were made around the world in a diverse range of asset classes but with most investments in mature markets such as the US and Europe. Key to the funds' investment activities is the flexibility with which it operates. Unlike other funds, which may have a preset equity and bond allocation set at 60 and 40 per cent or 70 and 30 per cent, the fund manager has the flexibility to allocate assets according to market conditions. For example, the fund manager believes that the bond yield is not attractive, and has chosen to be underweight in bonds and overweight in cash/currency, and short-term bonds. The fund management team is also investing in emerging markets in Asia and Eastern Europe.