INSIGHTS

Establishment of risk mitigation buckets

An evolving market environment has arguably diminished the role of traditional fixed income as a diversifier in portfolios, and led to a higher opportunity cost of holding bonds due to lower yields. This may suggest improved relative attractiveness of other equity risk mitigation approaches. In this research piece we discuss other approaches to risk mitigation and outline their merits, while tying these ideas to the Functionally-Focused Portfolios (FFP) approach to portfolio construction.