Risk management continues to pay off, in sharp contrast with last year’s market action. But nothing lasts forever — a maxim that’s in high gear in 2022 on multiple fronts.
The long-suffering Global Managed Drawdown strategy (G.B16.MDD) is in the lead year date. For the moment, that translates to a modest 1.4% loss, but that’s enough to put it comfortablt ahead of two other risk-managed strategies tracked on these pages. For details on the strategy rules and metrics in the tables below, see this summary.
More importantly, a 1.4% setback is conspicuously lighter vs. the benchmark, Global Beta 16 (G.B16), which avoids risk management per se and instead targets, regularly rebalances and continually holds the same 16-fund opportunity set in pre-set weights (see weights table below). G.B16.MDD is down nearly 7% this year through Friday’s close (Mar. 4).
Risk management’s edge could fade in a heartbeat if peace suddenly breaks out in Ukraine. Alas, that’s an unlikely scenario for the immediate future, or so the latest headlines suggest. Risk management’s day in the sun, in other words, may have a ways to go.