Bringing you live news and features since 2006 

Salient launches Salient Risk Parity Fund

RELATED TOPICS​

Salient Partners, a USD17.4bn asset management firm, has completed the launch of the Salient Risk Parity Fund.

The fund seeks to generate long-term capital appreciation by using risk parity, a global allocation and risk management strategy whereby risk is distributed equally across a broad set of asset classes within a portfolio while targeting a specific level of volatility, allowing dollar levels to adjust accordingly.

Under the risk parity framework, the fund seeks to keep volatility levels constant throughout all market conditions. In addition, asset classes are linked to major market drivers (growth, sentiment, inflation and deflation) while maintaining low correlations to each other.

"The erratic performance of the equity markets in recent years has brought home to investors the need to find an alternative to traditional asset allocation strategies," says Lee Partridge, Salient chief investment officer, who serves as the fund’s portfolio manager along with Roberto M Croce, Salient director of quantitative research. "The Salient Risk Parity Fund seeks to allow investors to create a truly efficient portfolio by more accurately reflecting the levels of volatility and correlation among asset classes, and in particular by reducing the dominance of equities within the investing portfolio."

The fund primarily invests in futures contracts and other financial instruments with exposure to global equity markets, global interest rates markets (related to government bond markets of developed nations) and global commodities markets. It targets a 15-per cent volatility level spread equally across equities, commodities, interest rates and momentum (the continuation of recent price trends).

"By offering the risk parity strategy in a mutual fund, Salient is giving a greater number of investors the opportunity to potentially achieve efficient diversification without overly relying on factors such as equity risk or emotional weights," says Partridge. "This innovative strategy seeks to eliminate the inefficiencies of more traditional asset allocations, giving investors more control over their risk level and providing an allocation alternative to equity concentration."

Latest News

ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..
Investors urgently need greater access to diversified investment strategies aligned with the Paris Agreement on climate change if the world..

Related Articles

Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Lorraine Sereyjol-Garros, BNP Paribas
Following changes to the French Monetary and Financial Code and of the French market authority AMF’s General Regulation, it is...
Ed Rosenberg, Texas Capital
Texas Capital Bank first opened its doors back in December 1998 and nowadays offers wealth-management services, as well as commercial,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by