by Ralph Stewart
Milliman says it strategy aims to stabilise the volatility of an investment portfolio during periods of significant and sustained market declines, providing investors with the same risk management techniques used by major financial institutions around the world.
Most attempts at managing portfolio risk have relied heavily on asset allocation—diversifying exposure among asset classes that have exhibited historically low correlation to one another. This approach has proven to be less effective during major downturns.
Milliman’s approach relies on using mathematical measures to assess volatility to manage risk.
Ralph Stewart is a director of NZ Income.
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