Insight is Capital™ Podcast Ep 85 Return Stacking: Strategies for Overcoming a Low Return Environment
Adam Butler, CIO and Rodrigo Gordillo, President, of ReSolve Asset Management Global join Pierre Daillie, from AdvisorAnalyst.com for an amazing discussion about ReSolve's latest research paper, "Return Stacking: Strategies for Overcoming a Low-Return Environment."
In our discussion we cover the following points on this novel investment concept of portfolio construction:
- Stretched valuations in equities and fixed income imply depressed returns and higher potential volatility for traditional portfolios.
- Reaching for yield or increasing exposure to pro-cyclical assets may help compensate for low expected returns, but can increase portfolio risk.
- Reducing exposure to equities and bonds to accommodate non-correlated assets or alternative strategies may reduce risk, but at the expense of lower potential returns and painful tracking error.
- We introduce a novel investment concept, accessible to all investors, which is designed to seek higher returns with less risk and low tracking error by using new products which, in combination, can provide more than $1 of exposure for every dollar invested.
- The proposed solution harnesses the full potential of traditional portfolios plus the opportunity for higher returns and risk reduction from non-correlated investments.
- This capital efficiency allows for the introduction of non-correlated return streams that stack on top of core portfolio exposures.
- We show how to maximize “Return Stacking” opportunities by choosing alternative fund managers already engaging in capital efficient strategies.
You can download the paper here (https://investresolve.com/return-stacking-strategies-for-overcoming-a-low-return-environment-lp/).
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