25 September 2015
How generate value in a more uncertain world?
"(...)In the context of greater uncertainty we believe that multi-asset investing can no longer be built upon the predication of passive diversification. Making strong hypotheses around historical correlations also comes with its drawbacks and lacks robustness specifically when there is the need to adapt to situations that impact asset classes broadly. Correlation tends to have an unhealthy relationship with volatility which makes many forms of prediction unreliable. Hence, value creation that is independent from market direction (often referred to as alpha) can seem elusive and challenging to capture."