A recent research piece on risk budgeting and risk management by some investment managers leaves a lot to be desired for clients.  The paper argues that just like in golf, one wants the ball to be in the fairway for the better part of the game (or in their parlance, the “green zone”); in portfolio management, clients should require their managers to keep their risk in a relatively tight range around some target.

Author: Arun Muralidhar, Ph.D.