Defensive Equity Strategies

Top recent papers on defensive equity strategies, low volatility, and hedging

Defensive equity strategies can take a variety of forms. The papers below survey many of these defensive strategies, comparing their objectives, their methodologies, and their results.

Are traditional 'defensive' sectors really that defensive anymore? Does the low volatility anomaly exist in all markets? How should an investor manage sequencing risk within retirement portfolios? The answers to these questions are likely just a click or two away. 

Defensive Equities

Making Sense of Defensive Equity Indexes (Intech, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Intech examines the defensive equity portfolios termed 'indexes' from equity benchmark providers vs their counterpart cap-weighted indexes. They also look at the best way to measure defensive equity strategies.

Implementation considerations for defensive strategies (FTSE Russell, 2019)

For compliance reasons, this paper is only accessible in certain geographies

FTSE Russell looks at three different defensive approaches - minimum variance, low volatility factor, and equal risk contribution. The authors examine the objectives and methodoligies behind these strategies as well as their investment outcomes.

Podcast: Consumer staples and defensive strategies (Fidelity Intl, Jul 2019)

For compliance reasons, this paper is only accessible in certain geographies

Traditionally defensive stocks such as consumer staples have recently been rattled by industry acquisitions, changing consumer trends, and the prevalence of cheap debt. Have these events changed the nature of this 'defensive' sector?

Defensive Versus Cyclical: The Blurring Lines (PIMCO, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Credit investors occasionally look to the equity market as a leading indicator and for info about growth expectations. However, equity markets have recently been sending mixed signals - as evidenced by improving credit quality in cyclical sectors and declining credit quality in defensive sectors.

Evaluating and Implementing Defensive Equity Strategies (Intech, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Intech evaluates several defensive equity strategies, classifying them by their approach and their outcome.

Did defensive strategies get the job done in the recent downturn? (FTSE Russell blog, 2019)

For compliance reasons, this paper is only accessible in certain geographies

An increase in stock market volatility can also spark interest in defensive strategies that offer downside protection. But how did some of these defensive strategies react to the December 2018 meltdown and the quick rebound in early 2019?

The Best of Strategies for the Worst of Times: Can Portfolios be Crisis Proofed? (Man Group, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Man Group looks at some of the best strategies for crisis-proofing equity portfolios, including put options, going long in gold or credit protection, long/short quality stocks, and more.

Low Volatility Strategies

Webinar 12 Mar - Managing Volatility: Index approaches for a smoother ride (FTSE Russell, 2019)

For compliance reasons, this paper is only accessible in certain geographies

This FTSE Russell webinar discusses how index-based strategies can help to limit volatility and risk within portfolios.

Is the Low Volatility Anomaly Universal? (S&P Dow Jones Indices, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Low volatility strategies offer protection in down markets without sacrificing too much upside participation. But they have also consistently outperformed their benchmarks. Does this anomaly exist universally?

Smart Factor Design: A More Robust Defensive Offering (Scientific Beta, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Investors with different constraints and objectives should gravitate towards different portfolios. Scientific Beta looks at how three defensive equity indices address a variety of needs for investors.

Defensive Factor Indices versus Active Funds (S&P Dow Jones Indices, 2019)

For compliance reasons, this paper is only accessible in certain geographies

S&P Dow Jones Indices rewinds the clock to 2018, comparing the performance of mutual funds that are actively managed and defensive factor strategies that are more passive in nature. Which fared better during the rollercoaster that was 2018?

Hedging

Hedging: Should You or Shouldn’t You? (Parametric, 2019)

For compliance reasons, this paper is only accessible in certain geographies

This paper seeks to evaluate the historical costs and benefits associated with an equity portfolio hedge in order to understand the tradeoffs associated with a typical hedging strategy.

Podcast: Diversify or Hedge? (AQR Capital Management, 2019)

For compliance reasons, this paper is only accessible in certain geographies

How does diversification differ from hedging and what are the advantages and disadvantages of a well-diversified approach? This podcast discusses risk-adjusted returns, hedging, and diversification in detail.

Return Sequence Risk

Video: Managing Downside Risks for Retirement (S&P Dow Jones Indices, 2019)

For compliance reasons, this paper is only accessible in certain geographies

Index strategies can be used to help mitigate sequencing risk for retirement portfolios. Herein, a panel of experts discusses risk management practices within retirement strategies.

Build a Better Path to More Efficient Income (AB, 2018)

For compliance reasons, this paper is only accessible in certain geographies

AB demonstrates how access to more efficient income via the creation of a better return sequence may be even more critical than seeking higher returns for retirement portfolios.