Enhanced Portfolio Diversification: The Power of &

Traders Magazine Online News, August 2, 2018

John D'Antona Jr.

Do you worry about risk?

Then a new white paper by Ampersand Portfolio Solutions, Enhanced Portfolio Diversification: The Power of & might be for you. The new paperprovides an in-depth look at the details associated with structuring overlays as a way to hedge equity-related risk.  In prior white papers, The Risk Contribution of Stocks, Parts 1-3 and Looking Under the Hood, Ampersand introduced a concept to diversify beyond stocks and bonds without having to sell the stock/bond portfolio holdings. The latest paper delves deeper and illustrates how equity risk can be managed or mitigated using creative enhanced diversification solutions.  Ampersand Portfolio Solutions, a division of Equinox, collaborates with select asset managers to construct bespoke investment solutions.

Ampersand’s white paper, Enhanced Portfolio Diversification: The Power of &, the fifth in a series, recaps the risks associated with a 60/40 stock/bond portfolio, showing that 92% of the risk is contributed by stocks. Diversifying the portfolio by adding another asset class such as managed futures, other alternative investments, or “hedge fund strategies” can help to mitigate risk, provide a smoother ride for investors, and enhance performance.

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