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Hedgewise Outperforming Every Major Risk Parity Mutual Fund in 2016
Posted in Investment Strategy on 2016-09-17

Since launching two years ago, the Hedgewise Risk Parity strategy has consistently outperformed every other major competitor in the marketplace. I'm extremely proud to now have evidence that Hedgewise is offering a truly best-in-class product.

There are two major mutual funds offering some form of Risk Parity product: AQR (AQRNX) and Invesco (ABRYX). Thus far in 2016, Hedgewise has consistently outperformed both those funds by over 3% while maintaining a relatively high correlation. In other words, we are doing what they are doing, just consistently better, more tax efficiently, and with 40% lower fees.

Performance of Hedgewise vs. Major Risk Parity Mutual Funds, 2016 YTD

Hedgewise performance based on the composite average performance of clients in the "RP High" portfolio. Includes all dividends and fees.
Two of the most common questions that potential new clients have when considering Hedgewise are:
  • How do I know you are running a true Risk Parity framework?
  • What makes it better than using a mutual fund or trying to build it myself?

I'm incredibly excited to now be able to answer these questions with undeniable facts!

Disclosure

This information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice. Hedgewise makes no warranties and is not responsible for your use of this information or for any errors or inaccuracies resulting from your use. Hedgewise may recommend some of the investments mentioned in this article for use in its clients' portfolios. Past performance is no indicator or guarantee of future results. Investing involves risk, including the risk of loss. All performance data shown prior to the inception of each Hedgewise framework (Risk Parity in October 2014, Momentum in November 2016) is based on a hypothetical model and there is no guarantee that such performance could have been achieved in a live portfolio, which would have been affected by material factors including market liquidity, bid-ask spreads, intraday price fluctuations, instrument availability, and interest rates. Model performance data is based on publicly available index or asset price information and all dividend or coupon payments are included and assumed to be reinvested monthly. Hedgewise products have substantially different levels of volatility and exposure to separate risk factors, such as commodity prices and the use of leverage via derivatives, compared to traditional benchmarks like the S&P 500. Any comparisons to benchmarks are provided as a generic baseline for a long-term investment portfolio and do not suggest that Hedgewise products will exhibit similar characteristics. When live client data is shown, it includes all fees, commissions, and other expenses incurred during management. Only performance figures from the earliest live client accounts available or from a composite average of all client accounts are used. Other accounts managed by Hedgewise will have performed slightly differently than the numbers shown for a variety of reasons, though all accounts are managed according to the same underlying strategy model. Hedgewise relies on sophisticated algorithms which present technological risk, including data availability, system uptime and speed, coding errors, and reliance on third party vendors.

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