Portfolio construction: Between risk mitigation and high returns

Hedge risk and extract alpha through quality insights

These timely insights bring the latest thinking on portfolio construction, from the traditional to more innovative frameworks. They also discuss all manner of risk, including concentration risk, liquidity risk, and volatility.

Alternatives & Strategic AA: Creating a Robust Framework (Deutsche Wealth)

Integrating alternative investments into a portfolio’s strategic (i.e. long-term) asset allocation brings a wide range of advantages to investors.

Portfolio Resilience: Risk Premia & Tail-Risk Hedging (Franklin Templeton)

For compliance reasons, this paper is only accessible in the EMEA region

Alternative assets and strategies are intended to expand the investable opportunity set and improve the risk-return dynamics of traditional portfolios.

A Portfolio Fit for the Future (Natixis IM)

For compliance reasons, this paper is NOT accessible in the United States and Canada

Is it time to retire the traditional 60/40 model? Should investors look toward the 50/30/20 allocation framework?

Incorporating a Total Portfolio Approach (Two Sigma)

A Total Portfolio Approach moves away from asset classes and labels and instead considers the fundamental risk factors of the total portfolio.

An Unexpected Diversifier – Iron Ore (S&P Dow Jones Indices)

Commodities such as gold, crude oil and copper, have historically served as a potential hedge with low or negative correlation with traditional assets.

Drawdowns and Recoveries: Base Rates for Bottoms and Bounces (Morgan Stanley IM)

Studying drawdowns provides investors with useful context to understand equity markets in general and the returns of individual stocks in particular.

The “4-5-6” Playbook: The Real Future of Markets (Bianco Research)

A long-term outlook where cash returns 4%, bonds 5%, and stocks just 6% provides investors with little hope for return outside private markets.

Are Investors Paying Too Much for Risk Exposure? (Vanguard)

For compliance reasons, this paper is only accessible in the United States

Performance is the compensation that investors make for the risks they take. How should investors therefore think about risk exposure and returns?

Private Debt and Its Role in Your Portfolio (New York Life Investments)

Traditional or core investments such as public equities and bonds can be easily liquidated in normal markets, but not private assets.

Portfolio Construction: A Simple Formula to Assess Risk Reduction (PMR)

Investors only need 30 to 50 assets to reach the optimal level of diversification in most cases. Beyond this, investors will see diminishing risk-related benefits.

What is Total Portfolio Approach? A Practitioner Summary

The way institutional investors approach portfolio construction is undergoing a quiet, yet profound shift.

Are Completion Portfolios Effective for Managing Concentrated Stock Risk? (AQR)

In this paper, the authors examine one technique for reducing concentrated stock risk—a completion portfolio approach.

A Framework for Private Credit Portfolio Construction (HarbourVest Partners)

As investors increase their exposure to private credit, a framework for portfolio construction can help navigate the increasing complexity of this market.

Are Your Portfolios Ready for Reversals? (Brandes Investment Partners)

The dominance of the U.S. market has led many investors to become overexposed to U.S. equities. Is now time to look outside the U.S. market for equity returns?