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Chief Investment Quarterly

You Can’t Hedge, but You Can Diversify

Investors may benefit from adding diversifiers to their portfolios, but diversifiers aren’t hedges. Hedges serve a different purpose…unless they’re from Texas.

Alternative Thinking

Ideas for a Low-Expected-Return World

There are different ways to achieve ambitious real return targets, but we think risk-balanced diversification across well-chosen return sources is the most reliable, strategic approach.

Trade Publication

Risk Parity: A Supplement to Traditional Portfolios, Not Their Replacement

It is often said that long-term investors can rely on equity returns since they can withstand short-term periods of underperformance and still survive to realize the benefits in the long-term.

Risk Parity in Target-Date Funds

Target-date funds (TDF) have a few shortcomings, but we believe that implementing risk parity as a sleeve within a TDF can help—by potentially enhancing returns, mitigating risk and reducing portfolio drawdowns.

White Paper

Portable Beta?

We believe investors are not optimally diversified across betas. We suggest greater exposure to low-volatility betas (such as fixed income risk premia) and levering this optimal combination of betas to the desired risk level.

White Paper

Dog Bites Man: In August, Equity Selling in Risk Parity Was a Tiny Fraction of Market Volume

Commentators like to believe all price changes are about investors moving capital. But prices can move without trading, or with very little trading, if investors’ assessments of fundamentals or their eagerness to take risk, changes.

White Paper

Not Risk Parity Funds

The source of the recent market disruption may not be fully understood yet, but we can reveal what it wasn’t.

White Paper

Can Risk Parity Outperform If Yields Rise?

Risk parity investing is not, as some critics say, simply “leveraging bonds.” The evidence suggests that a risk parity portfolio may improve long-term risk-adjusted returns relative to traditional, equity-centric portfolios.

White Paper

Understanding Risk Parity

This paper describes a simple risk parity strategy and compares its performance to the typical 60/40 portfolio over nearly 40 years of historical data.

White Paper

Risk Parity, Risk Management and the Real World

At its core, risk parity is an argument about the importance of diversification. Long term, we think the best risk parity portfolios will be those that both adopt a dynamic approach to risk management and have a plan to preserve capital in a crisis.