Volatility indexes are poor hedge against tail risks, say managers

Systematic indexes become expensive "just when you need them", portfolio manager

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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 i

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