What does diversifier mean?
A diversifier is a person, organization, product, or other thing that makes an activity, investment, or portfolio less dependent on a single source. Its purpose is generally to introduce variety and reduce concentration risk. For example, a business may acquire another supplier to create a diversifier capable of maintaining output if the original supplier fails. In finance, the word often refers to an asset or investment whose performance differs sufficiently from that of a portfolio's other holdings to reduce overall volatility. The term is also used more broadly in discussions of markets, media, education, and public life, where it can describe anything that broadens participation or reduces reliance on one dominant voice or activity. Because “diversifier” identifies an agent that produces variety, it should not be confused with “diversified,” which describes the varied result. It is especially useful when discussing the practical value of breadth rather than simply the existence of variety.
nounA person, organization, product, or other thing that makes an activity, investment, or portfolio more varied, typically by reducing reliance on a single source.
- A person, organization, product, or other thing that introduces variety or reduces dependence on a single source.
- An investment or asset held partly to reduce the risk that a portfolio will be concentrated in one sector, company, or type of asset.
"The company introduced a second supplier as a diversifier against the risk of disruptions at its original source."
"Independent media outlets can serve as an important diversifier of public discussion."
"Adding government bonds to an equities-heavy portfolio may provide a modest diversifier during periods of market stress."
The regular plural is used when referring to multiple people, organizations, assets, or other things that diversify a business, activity, or portfolio.
"The managers treated infrastructure and government bonds as complementary portfolio diversifiers."
In finance, a good diversifier may be valued less for what it earns than for how it cushions the portfolio when other investments go badly.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does diversifier come from?
The English noun diversifier was formed by adding the suffix -er to diversify, identifying a person or thing that performs the action of making something more varied. Diversify came through Old French diversifier from Latin diversificare, a verb based on diversus, meaning “different” or “various.” The same Latin foundation also produced diverse and diversity, while versifier illustrates the same rhyming and suffix pattern in a different word.
How diversifier is actually used
This is principally a formal business, investment, and economic term. It normally implies active variety or risk reduction, rather than merely describing something that happens to be varied.
Easily confused with diversifier
A diversifier is something that performs the action of making a business, portfolio, or activity more varied, whereas diversified describes something that already contains a variety of elements.