Articles - Milliman Protection Strategy


Since the early 1950s, most attempts at managing portfolio risk have relied heavily on asset allocation—diversifying exposure among asset classes that have exhibited historically low correlation to one another. This approach has proven to be less effective during major downturns. In 2008, for example, nearly every major asset class was affected by the global economic downturn.

The high correlation among many of the world's major asset classes was likely not a black swan event, but rather the inherent reaction of ever-more-connected global economies.

The declining effectiveness of conventional risk management and the introduction of new risk management strategies have the potential to transform the way people manage risk and save for retirement.

The Milliman Protection Strategy aims to stabilize the volatility of an investment portfolio during periods of significant and sustained market declines, providing investors with the same risk management techniques used by major financial institutions around the world.

 

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