Macquarie Investment Management has released its monthly insights, discussing the potential for low volatility stocks to achieve equal and better returns to higher volatility stocks. Research in 2012 found that riskier stocks not only returned less, but have a volatility drag which negatively impacted compound return by an even greater amount. Macquarie sought to explain the reason for these findings through factors such as leverage reluctance, lottery investing and overconfidence of the market. They also provide the benefits which low volatility investing could bring to a portfolio such as compounding benefits, risk-budgeting, de-risking and benchmark outperformance. (VIEW LINK)
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