The vagaries of market forces are presenting a financially challenging environment for the higher education sector in England. Intense competition is leaving those overly dependent on tuition fee income in an exposed position. Despite a strong narrative for the need to diversify funding in the available higher education literature, empirical studies examining the degree to which universities are financially diversified are sparse and lack contemporary relevance. This study is the first to produce a National Income Diversification Index for publicly-funded, generalist universities in England. In doing so, it develops a model for a more accurate financial assessment by disaggregating third-stream revenues from core income. The findings suggest established pre-1992 universities are more financially diversified and thus in keeping with modern portfolio theory, are less vulnerable to changes in their external environment. This paper calls for policymakers to include the level of income diversification in any measure of institutional financial health.