2015 Risk Parity Investment Survey

Risk parity is in the news like never before. What does this mean for its users?

Did risk parity bring down financial markets in August?

That some consider this a legitimate question should actually warm the hearts of risk-parity providers.

Why? Because it’s unlikely that the strategy—still tiny by market standards—caused much of anything in August, and because such statements mean that risk parity has successfully seeped into the collective consciousness of Wall Street and the media that covers it.

But for those investing in the strategy—93 of which filled out this survey— such press is far from heartwarming. According to this year’s survey, conducted during the very month (August) that brought it such attention, skittishness abounds.

Just 19% of current users plan to increase allocations in the next 12 months, a fall of 30% since last year; a full 16% plan to decrease their allocation, up 146% over last year.

The reasons why will come as no surprise to industry watchers: While client service remains a strong selling point for risk parity (4.38 out of 5), ratings for product performance since inception (3.65) and product performance in the past year (3.17) are less favorable. In total, 42% of users are “quite” or “extremely” concerned about performance. No other concern—from use of leverage to peer risk to transparency—comes close.

This time in risk parity’s history is unique, advocates will say. Whether that’s true—and whether the strategy’s current ills vanish—will be something worth watching (and writing about) for some time to come.


Chief Investment Officer’s 2015 Risk Parity Investment Survey was conducted from July 11 until September 21, 2015, and asked defined benefit and defined contribution corporate and public pensions, endowments, foundations, insurance funds, health care organizations, and sovereign funds about their practices and views on risk parity investment strategies and vendors. Of all responses, 266 qualified by being from (a) a senior investment official at (b) a qualified fund. Of the 266 qualified responses, 93 indicated that they currently use risk parity strategies, and 173 were non-users. Duplicate responses from the same fund were counted as only one response. All percentages in the survey charts are rounded to the nearest percent. Percentage change figures are calculated on the actual unrounded results. For more information, contact surveys@assetinternational.com.

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