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It's an interesting global allocation fund that they are presenting as a risk parity fund - which I'm not sure this fund always was (it looks like it was changed from a balanced fund to a risk parity strategy not that long ago?). Personally, I'd recommend AQR Risk Parity instead (AQRNX) - AQR has a history with the strategy and the AQR fund's somewhat clearer take in terms of the strategy.
I continue to like the RP space, and own 4% positions in both AQRIX and ABRIX. MMAFX became a RP fund as of 9/15/2009.
Here is a recent paper authored by Cliff Asness of AQR which offers a compelling argument in favor of RP -- take a good look at Tables 2 & 3, and Figure 1:
As I said in another post...I stay FAR away from any strategy that smells of "risk parity". Basically mix in some stocks and a touch of commodities and add a heaping scoop of leveraged bonds.....and make sure to mix in a bunch of derivatives such as swaps just to make sure your adding (I mean "balancing") all your risks.
Reply to @WallStreetRanter: Thanks for the article. It is very well written and arguments against the risk parity portfolios as implemented today are clear.
Comments
I have a small position at Schwab, but can no longer add to it
Regards,
Ted
http://online.wsj.com/article/SB10001424052970204542404577158970902886322.html?ru=yahoo&mod=yahoo_hs#printMode
Here is a thread which you might find helpful:
http://socialize.morningstar.com/NewSocialize/forums/t/294193.aspx
I continue to like the RP space, and own 4% positions in both AQRIX and ABRIX. MMAFX became a RP fund as of 9/15/2009.
Here is a recent paper authored by Cliff Asness of AQR which offers a compelling argument in favor of RP -- take a good look at Tables 2 & 3, and Figure 1:
http://www.econ.yale.edu/~af227/pdf/Leverage Aversion and Risk Parity - Asness , Frazzini and Pedersen.pdf
Kevin
Decent GMO paper here
http://www.scribd.com/thebigpicture/d/27916202-GMO-The-Hidden-Risks-of-Risk-Parity-Portfolios
The Wall Street Ranter