Diversified Risk Strategies
Investors typically seek compensation for taking on risk; as a result, all asset classes that are perceived to bear risk must offer an associated risk premium. Diversified Risk is a framework that seeks to capture risk premium more efficiently than alternative approaches, through an approach based upon Risk Parity. Risk Parity is a methodology that aims to balance risk exposures in a given portfolio in an optimal fashion, so as to avoid risk concentration – be it across asset classes, or within asset class.
At PanAgora, the Diversified Risk approach may be applied in a multi-asset class portfolio that has exposure to equities, bonds, commodities and other inflation-hedging instruments, as well as within certain stand-alone asset classes. By applying risk balance across and within asset classes, and by using proprietary techniques like Dynamic Risk Allocation, PanAgora’s Diversified Risk suite of products seek to achieve higher risk-adjusted returns, with lower volatility and draw-downs than more traditional approaches.
Current offerings include:
- Risk Parity Multi Asset
- Risk Parity Multi Asset Plus
- Diversified Risk Equity
- Diversified Risk Commodity
- Diversified Risk Fixed Income
For information on any of these strategies, please contact us.