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Is Your Low Volatility Strategy Good Enough? Test It Overseas February 12, 2021
A low volatility strategy can help investors avoid market queasiness. According to a recent Forbes article, one great way to test such a strategy is to see how it fares overseas.
“One robust way to test out factors is to see if they hold up across geographies,” the Forbes article said. “Researchers have found that low volatility does appear to work in China for the A Shares Market, though in a slightly different manner to the U.S. market. This is also relatively recent research looking at the 2000-2018 period, so may be less prone to the issue that historical performance can decline once the factor is well understood. This research is titled ‘The Volatility Effect in China’ and produced by researchers at Robeco Investments.”