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Windham Capital launches new approach to risk addressing turbulence on global markets

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Independent investment firm Windham Capital has launched innovative risk measures that mark a new approach to asset management through changing market conditions by managing risk as a cycle, not an event.  Available for the first time to private investors, the Windham strategy is not based on price volatility alone – as are most other models – but instead measures the interactions among asset classes to gauge opportunities in all market environments.

 
Windham’s approach addresses the fact that risk has hidden linkages across the broader economy, making the global markets even more fragile.  Expectations for sustained slow economic growth and continued market volatility signal a time to proactively manage risk rather than react to it.
 
“We focus on how risk evolves, not simply when it occurs, with a research-intensive approach that can measure risk, detect changes and manage it in an effort to maximize returns,” says Mark Kritzman, CIO of Windham Capital.  “In short, our proprietary measures enable us to exploit the relationship between risk and return to help investors achieve the best possible outcome, whether the markets are calm or turbulent.”
 
Through its Windham Investment Risk Cycle, Windham uses proprietary measures of risk, including turbulence, which shows the interactions among a wider set of assets and is designed to anticipate broader market selloffs, and systemic risk, which reflects how fragile a market might be based on whether it is “tightly coupled” (unrelated sectors move in unison) or “loosely linked” (little price correlation).
 
“This economy is forcing investors to break the old habit of analyzing historical norms to anticipate where the best returns will be,” says Stan Shelton (pictured), managing partner, Windham Capital. “Windham’s approach is unlike others in that we seek to invest intelligently throughout the entire risk cycle, measuring current conditions to determine where to be at all times, rather than simply timing when to get in or out of the market.”
 

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