Ray Dalio's Way Loses Shine As Investors Yank Out Billions From Risk-Parity Funds After Disappointing Returns: But Is It A 'Classic Investment Error?'
Portfolio Pulse from Shanthi Rexaline
Investors are withdrawing billions from risk-parity funds, including those promoted by Bridgewater Associates and Ray Dalio, after years of underperformance compared to traditional investment strategies. Public pension funds in New Mexico, Oregon, and Ohio have pulled investments, contributing to a $70 billion decline in assets from a peak of $160 billion in 2021 to $90 billion by the end of 2023. Despite the current downturn, proponents argue risk-parity is superior for long-term investing. The SPDR S&P 500 ETF Trust (SPY) and the RPAR Risk Parity ETF (RPAR) are mentioned in the context of market performance.
April 23, 2024 | 7:39 am
News sentiment analysis
Sort by:
Descending
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) saw an increase, ending up 0.92% at $499.72, reflecting positive market sentiment.
SPY's increase reflects broader market sentiment and may continue to attract investors looking for stable, diversified exposure to the U.S. equity market.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
The RPAR Risk Parity ETF (RPAR) closed 0.16% lower at $18.63 and is down over 5% over the past year, indicating challenges for risk-parity strategies.
RPAR's decline is directly related to the broader challenges facing risk-parity funds, including investor redemptions and underperformance compared to traditional investment strategies.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70