Risk-based strategies – do they actually work?

• Does theory work in practice?
  
• Risk-based multi-asset strategies as indices.
  
• Performance evaluation.

Whilst sound in theory, do risk-based strategies work in practice?
To find out, we took at the performance of a multi-asset Risk Parity Index and a multi-asset Minimum Variance index.
Risk Parity aims to achieve equal risk contribution from each asset class
Min Variance aims to combine each asset class to achieve a minimum variance portfolio
On a rolling five year basis, both multi-asset Min Volatility and Risk Parity offered superior risk-adjusted returns relative to a 60/40 Portfolio for GBP investors.
Both Min Volatility and Risk Parity offered a lower level of overall risk relative to a 60/40 portfolio.
Get the full report here
http://www.elstonetf.com/store/p3/Multi-Asset_Indices%3A_risk-based_strategies.html