With asset diversification, you will own several assets, which helps with spreading out the investment risk rather than placing all your funds into one asset and relying solely on that asset’s success.
If you invest your limited capital into one asset and that asset fails to perform, you have an opportunity cost to that capital. Conversely, if you invested that capital in a fund, it is likely that some assets will perform as described, some will outperform, and some will underperform. The variance in how each asset performs is a form of protection for your investment.
This diversification helps to place your capital in the best possible scenario to make great returns while protecting those funds.