Discuss the idea of diversification in investments and how can Saudi Arabia’s economy benefit from this concept?

Discuss the idea of diversification in investments and how can Saudi Arabia’s economy benefit from this concept?

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Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.

Saudi Arabia is stepping up plans to turn its sovereign wealth fund into a global giant. The Public Investment Fund is central to the government’s effort to diversify the economy away from oil, under a plan known as Vision 2030.

The Saudi Public Investment Fund seeks to become one of the largest sovereign wealth funds in the world. To achieve this, the Fund is building a world-class, diversified portfolio through investments in attractive, long-term opportunities at both the domestic and international level.