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Low-volatility stocks are known to lag in rising markets and lose less in falling markets. On average this is true, but is it always the case? Examining the historical evidence we find that unlikely scenarios – both positive and negative - do occur once in a while. Low-volatility investors should therefore not only focus on averages, but consider a broader range of possible outcomes.
Low-volatility investing is becoming more popular. Many professional investors currently explicitly allocate a significant portion of their portfolio to low-volatility stocks. Robeco uses an enhanced approach to increase returns and reduce risk.
The current stock market turbulence creates opportunities for stock pickers who look for dislocations between corporate reality and market froth. That’s the conviction of Robeco Boston Partners’ Chris Hart. The portfolio manager, who has been nominated for the Morningstar Awards nine times in Europe, reveals the secrets behind his outperformance.