Search results for: risk allocation

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Does a perfect policy portfolio exist?

Risk Parity represents a significant advance in asset allocation, but we don’t believe that there is a single perfect policy portfolio. While Risk Parity works well in neutral markets, we don’t think it is the best policy under bearish, bullish or highly bullish market conditions.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing

Constraints of convention — Does a portfolio design have to be static?

A 60/40 portfolio may appear to be balanced, but when viewed through a risk lens it is clear that the equity allocation comprises a disproportionate amount of the risk. As a static strategy, the very thing that has helped risk parity succeed over time may prove to be its biggest liability going forward, and that is all those extra bonds.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing, Markets

Reducing risk — Absolute return and the pursuit of better diversification

Most investors are familiar with diversification — reducing one’s risk profile (i.e, annual volatility) without affecting return by adding different asset classes or investments to your portfolio. While this is true, the degree of risk reduction benefit depends directly upon the correlation of the portfolio’s assets.

Tagged with: Asset Allocation, Economy, Equities, Fixed Income, Markets

Global Asset Allocation Outlook (June 2014)

In contrast to last year, so far this year all major asset classes have performed well. Developed market equities, bonds, emerging market (EM) equities and EM bonds, and commodities are all up year to date in the range of 4%-8%.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing, Markets

Finding bond opportunities throughout the business cycle

Global bond markets respond in different ways throughout the business cycle. A flexible strategy can adapt its risk complexion to capture opportunities and mitigate downside.

Tagged with: Fixed Income, Investing

Q&A with Jeff Knight

Q: What indications did you observe that pointed to the recent market volatility storm? A: In our adaptive risk allocation framework, one of the key first level characterizations we make on markets is whether interest rates are normal or too low.

Tagged with: Asset Allocation, Equities, Fixed Income, Global Economy, Investing

Credit alternatives in government-backed debt

One way investors may boost yields without taking on undue credit risk is through U.S. government agency debt. While many investors associate U.S. agency debt with very low yields, other types of agency debt can offer significant spreads to Treasuries with a modest decline in liquidity.

Tagged with: Fixed Income, Investing

Ghost of crises past

The market’s extended period of low volatility was shattered in the past month. While it is possible fear-driven selling could resume or accelerate, we do not believe this is the most likely outcome.

Tagged with: Economy, Investing, Markets

Global asset allocation outlook (August 2014)

We have advocated an overweight to equities for several years. Even through the early year setbacks for the global economy and for global stocks, our views favored equities over other investment choices.

Tagged with: Asset Allocation, Equities, Fixed Income, Investing
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About Us

Backed by more than 100 years of experience, Columbia Management is one of the nation’s largest asset managers. At the heart of our success and, most importantly, that of our investors, are highly talented industry professionals, brought together by a unique way of working. At Columbia Management, reaching our performance goals matters, and how we reach them matters just as much.