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Financial Intermediaries
Financial Intermediaries
Risk management is a key element of active portfolio management. Generating outperformance in down markets (via reducing risk) versus generating the same outperformance in up markets (via increasing risk) can have a materially different journey for the end investor. A portfolio which generates alpha by reducing risk will generally exhibit lower volatility and be exposed to less sequencing risk than the alternative. In this month’s Market Insight, we demonstrate quantitatively the impact of this on a hypothetical household using our in-house retirement income model.
Risk management is a key element of active portfolio management. Generating outperformance in down markets (via reducing risk) versus generating the same outperformance in up markets (via increasing risk) can have a materially different journey for the end investor. A portfolio which generates alpha by reducing risk will generally exhibit lower volatility and be exposed to less sequencing risk than the alternative. In this month’s Market Insight, we demonstrate quantitatively the impact of this on a hypothetical household using our in-house retirement income model.
Risk management is a key element of active portfolio management. Generating outperformance in down markets (via reducing risk) versus generating the same outperformance in up markets (via increasing risk) can have a materially different journey for the end investor. A portfolio which generates alpha by reducing risk will generally exhibit lower volatility and be exposed to less sequencing risk than the alternative. In this month’s Market Insight, we demonstrate quantitatively the impact of this on a hypothetical household using our in-house retirement income model.
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