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&#39Savers have not learned lessons of tech collapse&#39

Investors are still following fads and do not understand the basics of asset allocation, says Isis.

The bursting of the dot.com bubble means that investors have become more concerned about risk in general but Isis believes that they do not understand the risk of chasing performance.

The fund firm says that understanding of asset allocation is so low that investors need extensive education or should hand their investments to fund of fund managers.

Isis considers that investors should learn from the technology crash and never invest in a sector without first considering the impact on overall asset allocation and risk profile.

Director, head of communications and strategy Jason Hollands says: “Once again, investors are throwing their money behind asset classes and sectors that have performed well recently and are largely ignoring the unfashionable areas which appear more attractive on fundamental indicators. Equities now offer decent value to gilts and in the bond market it is the high-yield end of the spectrum that should catch investor attention, not investment-grade bonds with yields at 50-year lows.”

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