A wide range of strategies may be used to diversify equity risk, each with their own unique set of performance characteristics in terms of long-term return, crisis return and consistency of crisis protection. Meanwhile, there is no “one size fits all” solution, and investors often face challenges in achieving reliable equity crisis protection without sacrificing persistent alpha.
Investors may be contemplating cutting duration risk and strategically repositioning allocations with the objective of building a portfolio of complementary convex strategies that can deliver both crisis protection and robust long-term returns. Here we explore the various implementation considerations for managing such a portfolio in terms of risk management, operational efficiency, and cost-effectiveness from both a manager and allocator perspective.
Join us as we discuss various considerations related to equity tail risk mitigation and contemplate ways to achieve consistent crisis protection without creating a terminal drag on returns during “normal” market environments.
