Factor Commentary

Minimum Volatility

01 mar 2016

Why lower risk doesn’t necessarily mean lower returns

Imagine a race between a speedy, boastful hare and a steady, quiet tortoise. You can think of minimum volatility strategies as akin to the tortoise – humble, sometimes overlooked, but a formidable participant in the race over the long-term.

Why aren’t all investors tortoises, then? Two persistent reasons:

  1. Structural impediments that require managers to chase higher risk stocks to achieve returns, bidding up prices in the process
  2. Behavioral biases of investors looking to “make it big” in riskier, more expensive stocks.

Investors not subject to these hurdles can take advantage of attractive values and potential for market-like performance with less risk.

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Andrew Ang, PhD
Diretor administrativo e diretor de estratégias baseadas em fatores da BlackRock
Dr. Ang lidera a plataforma baseada em fatores da BlackRock, englobando o desenvolvimento de ofertas baseadas em fatores e os recursos de análise de fatores, e ...