TY - JOUR T1 - A Portfolio Diversification Index JF - The Journal of Portfolio Management SP - 81 LP - 89 DO - 10.3905/jpm.2006.611807 VL - 32 IS - 2 AU - Alexander M. Rudin AU - jonathan S. Morgan Y1 - 2006/01/31 UR - https://pm-research.com/content/32/2/81.abstract N2 - Despite the importance of diversification in portfolio construction, our current methods of measuring it are inefficient. Construction of a Portfolio Diversification Index (PDI) presents a new way to understand the concept. PDI, which measures the number of unique investments in a portfolio, is useful to assess marginal and cumulative diversification benefits across asset classes and across time. Implementation in hedge fund strategies reveals that various hedge funds offer less diversification than may have been thought, and that there has been reduced diversification in the past several yearsTOPICS: Portfolio construction, real assets/alternative investments/private equity, performance measurement ER -