Fed, BOJ add shine to risk-parity strategy
The Federal Reserve and Bank of Japan's actions last week have given a second wind to an alternative investment strategy that relies on cheap money and low market volatility to produce outsized returns.
Risk parity trades, which involve borrowing to take long positions in both stocks and bonds, have been favored by some big hedge funds and other institutional investors starved for yield by eight years of record low global interest rates.
The funds had a rough 2015 when volatility spiked because of concerns about China's economy and tumbling oil prices, prompting investors to yank more than... read more
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