Volatility indexes are poor hedge against tail risks, say managers

Active strategies are more effective hedges than passive strategies when it comes to guarding against tail-risk events, said a panel of portfolio managers at the Inside Indexing Europe conference on Tuesday


Volatility indexes can only go so far in hedging against tail risk in a portfolio, said a panel of portfolio managers at a conference in London devoted to the subject of index-based investing. One panellist said he prefers active hedging strategies because even so-called "systematic" indexes become expensive "right when you need them" and can lose their effectiveness over time.

Ryan McRandal, head of thematic portfolio management at Axa Investment Managers in London, said he employs volatility

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