The ReSolve Global Risk Parity Strategy is constructed from a diverse universe of global asset classes so that the portfolio contains investments which can thrive in any economic environment. The portfolio is formed by ensuring that each asset contributes the same amount of risk to the portfolio. As asset relationships change over time, the Strategy responds with subtle shifts to maintain maximum diversification.
PERFORMANCE AND INFORMATION – US&INTERNATIONAL MANDATES
| US & International | Investment Vehicle | Inception Date |
|---|---|---|
| ReSolve Global Risk Parity: 12% Volatility (USD) | Separately Managed Account | Feb 2016 |
| ReSolve Global Risk Parity: 6% Volatility (USD) | Separately Managed Account | Nov 2015 |
Strategy Highlights
The ReSolve Global Risk Parity Strategy is constructed from a diverse universe of global asset classes so that the portfolio contains investments which can thrive in any economic environment. The portfolio is formed by ensuring that each asset contributes the same amount of risk to the portfolio. As asset relationships change over time, the Strategy responds with subtle shifts to maintain maximum diversification.
Risk Parity (RP) effectively bridges the gap between two foundational concepts in modern finance: efficient markets and Modern Portfolio Theory (MPT). That’s because a Risk Parity portfolio is optimal under MPT when investors have priced markets efficiently, so that major asset classes are expected to deliver returns in proportion to the amount of risk each contributes to the overall portfolio. Simply stated: for believers in efficient markets, RP maximizes the benefit of diversification.
One challenge with traditional RP implementations is that they assume markets are efficient at all times. The Enhanced Risk Parity strategy takes a less extreme view of efficiency, and operates under the slightly relaxed assumption that markets are efficient most of the time. To address this modified view, the Strategy regularly applies a proprietary statistical process to determine the likelihood that an asset has negative prospects. If so, exposure to the asset is scaled back proportionally.
ReSolve Risk Parity – Highlights
ReSolve Risk Parity – Solution Brief
Who is this strategy for?
The Strategy is consistent with the view that markets are mostly efficient, interrupted by periodic episodes of madness. By consistently harvesting the only ‘free lunch’ in investing – diversification – The ReSolve Global Risk Parity Strategy is designed to provide steady returns in most market environments, with minimal trading and turnover.