At Par with Risk Parity? 

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CFA Institute Conference Proceedings Quarterly
September 2011, Vol. 28, No. 3, 7 pages
Source: CFA Institute
Samuel Kunz, CFA

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Abstract

Risk parity attempts to remove the equity dominance of a traditional beta-allocated portfolio and equalize all asset risk contributions. The problem is that expected return declines. The solution is to leverage part of the, or the whole, portfolio. The benefits of a risk parity approach—better beta diversification and more efficient portfolios—come with several trade-offs to consider before a risk parity approach is adopted.

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Topics
Portfolio Management
    :
  • Asset Allocation
Price
US$0.00 Member | US$10.00 Candidate | US$10.00 Nonmember
Credits · About the CE Program
0.5 CE (including 0 SER) Manage CE Credits

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