Skip to content
Subscriber Only

No Quant Is Safe as Global Stress Hits Risk Parity Where It Hurts

  • Diversification method challenged as vol rose to 2-year high
  • Risk-parity managers fret investors to chase returns elsewhere
Video player cover image
Oil, Copper Rally as Commodities Bounce Back

Choppy markets around the world are hurting one of Wall Street’s hottest quantitative trades, belying its status as a port in the storm.

The commodity train wreck, emerging-market turmoil and shifts in government bonds have created a wave of turbulence for risk-parity funds, a strategy first popularized by Ray Dalio that weighs exposures according to volatility measures.