MVO: concentrated assets
Do I understand correctly, that MVO leads to concentrated asset allocations, and this concentration is due to the fact that MVO is seeking the highest return assets, so it will concentrate the allocation to those assets?
Because this is in contradiction to the fact that MVO is also based on diversification… which means, concentration should not be an issue (though I know it is, because that is one of the MVO criticisms). How would you reconcile this? Thanks!!
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