Don’t Get Done In By Unintended Overweight Exposure

My latest post for Alpha Baskets covers a lot of ground and includes the following;

With a starting point being 60/40 equities/fixed income, the proposed (theoretical?) portfolio allocates 37% to fixed income so that’s not far from 40 but takes a lot from equities to put into diversifiers. Emerging market equity gets about 2/3rd of the overall equity allocation and using iShares funds as proxies, emerging market equity has a standard deviation of 15% compared to 10% for the S&P 500 so maybe the authors are viewing EM’s standard deviation as a form of leverage, more bang for the buck although to be clear the paper doesn’t say that.

Please click through to read the entire post.

Park Avenue in Arches National Park

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Virginia Lake (or Falls?) at Glacier National Park

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Mount Rainier National Park

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