New PICTON Investments poll reveals a gap between investor confidence and understanding of concentration risk in today's markets
Canadian investors are heading into the next 12 months with strong conviction in their portfolios, but new research suggests that confidence may be resting on shakier ground than many realise.
A survey commissioned by PICTON Investments and conducted by Pollara Strategic Insights found that 83 per cent of Canadian investors are confident their portfolios are well diversified.
But fewer than six in 10 (57 per cent) say they are familiar with index concentration, a structural shift in global equity markets that has fundamentally changed what diversification actually means in practice. Diversification may help manage risk, but it does not guarantee profits or protect against losses.
The findings present a clear challenge for financial advisors: a client who feels protected may not be asking the right questions.
The gap between confidence and understanding
The concept of diversification has long been shorthand in financial planning for spreading risk across sectors, geographies and asset classes. But as a small number of large companies, many of them tied to technology and artificial intelligence, now account for a growing share of major global indices, owning a broad basket of funds no longer guarantees the spread of risk it once implied.
Robert Wilson, Head of Innovation and Portfolio Strategist at PICTON Investments in Toronto, pointed to the distinction between knowing you're diversified and understanding what that means today.
"Diversification is about more than the number of investments in a portfolio," Wilson said. "As markets become more concentrated, investors need to understand not only what they own, but the risks that may exist beneath the surface of a seemingly diversified portfolio."
The survey, which polled 1,968 Canadian investors between August 6 and 14, 2026, found a pronounced awareness gap along generational lines. Among investors aged 18 to 34, 68 per cent said they were familiar with index concentration. Among those 55 and older, that figure dropped to just 46 per cent, a demographic that, for many advisors, represents a significant portion of their client base.
The data also suggest that understanding the issue correlates with greater portfolio confidence, not less. Among investors familiar with index concentration, 88 per cent reported being confident in their diversification - compared with 67 per cent of those with no awareness of the concept. Rather than creating uncertainty, knowledge appears to reinforce conviction.
A thin foothold in alternatives
Despite the growing conversation around portfolio resilience, Canadians remain heavily anchored to conventional investment vehicles.
Mutual funds, GICs, stocks and ETFs are by far the most commonly held products among Canadian investors surveyed. Only eight per cent reported holding alternative investments - a figure that stands in contrast to the direction the industry has been moving.
The broader alternatives conversation in Canada has been gaining momentum, but awareness among everyday investors remains limited. Just 31 per cent of respondents said they were familiar with alternative strategies such as hedge funds and liquid alternatives.
That unfamiliarity does not appear to reflect a closed door, however. Six in 10 investors (60 per cent) said they would like to learn more about how alternative investment strategies could impact their portfolios.
When asked what would increase their comfort level, the most common response was a better understanding of risks and benefits, cited by 25 per cent of respondents. A recommendation from their financial advisor came second at 22 per cent, followed by more education about how these strategies work, at 20 per cent.
Macan Nia, Investment Strategist at PICTON Investments, said the results point to an opening for advisors willing to lead that conversation.
"The conversation around diversification needs to evolve beyond simply owning more stocks and bonds to understanding how different investments can contribute to portfolio construction and risk management," Nia said.
The advisor's role in closing the knowledge gap
For advisors, the survey data carry a practical implication: client confidence is high, but client understanding may not be keeping pace with the complexity of today's markets. That gap represents both a risk (clients who don't know what they don't know) and an opportunity to deepen relationships through education.
Canadian advisors have long grappled with breaking home-country bias and concentration risk in global indices adds a new dimension to that challenge. A portfolio weighted toward broad index funds may carry more concentrated exposure to a handful of large-cap technology firms than a client realises.
At the same time, the appetite for broader education is clearly there. More than half of surveyed investors said they want to understand how alternatives could serve them — they just haven't had the conversation yet. With client interest in alternatives growing, the industry's trajectory suggests this conversation is becoming harder to avoid.
The PICTON survey was conducted online by Pollara Strategic Insights among 3,020 adult Canadians, with a sub-sample of 1,968 investors. The investor sub-sample carries a margin of error of ±2.2 percentage points, 19 times out of 20. Results were weighted using Statistics Canada data to reflect the national population. Pollara Strategic Insights is a member of the Canadian Research Insights Council (CRIC), and the study was conducted in compliance with CRIC standards.
