Why is a 100% bond portfolio deemed to have diversification when it only has one asset class?

The diversification rating tells you how concentrated the custom portfolio is relative to an optimized portfolio. An optimal 100% bond portfolio is able to maintain a low level of risk without diversifying across asset classes, and it is possible to diversify across funds within the bond asset class, so it is possible for a 100% bond portfolio be well diversified. It is important to note that all investing has risk regardless of portfolio allocation.