Acadian employees in conference room

Managed Volatility

Acadian’s managed volatility team pioneered risk-focused approaches to equity investing, and the team continues to be at the forefront of the development and management of these strategies.

With a dedicated team of portfolio managers, research analysts, continuous support of a broader equity investment team, and extensive data and technological infrastructure, Acadian has broad capabilities, which facilitate a number of regional managed volatility implementations.

Philosophy

Traditional finance posits a strong link between risk and average return: higher risk is rewarded with higher average returns. At the asset class level, there is some support for this relationship. Stocks are riskier than bonds, and generally stocks have provided investors with higher returns, presumably to compensate for their extra risk. However, it may surprise many investors to learn that within equity markets, portfolios of higher-risk stocks have substantially under performed their lower-risk counterparts. This anomaly offers intriguing potential investment opportunities: if risk is not rewarded, why hold risk? Acadian's managed volatility strategies focus on exploiting this mispricing and seek to realize similar, or better, returns than capitalization weighted indices with substantially lower risk. 

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