Simon Ho, CIO volatility specialists Triple3 Partners and manager of the Triple3 Volatility Advantage Fund writes for Money Management.

Despite periods of episodic volatility over the past few years, it has actually been one of the least volatile times, for realised volatility, compared with time frames over the past 50 years.

But despite there now being a number of market indicators that suggest global assets are overpriced – price-earnings ratios at high levels, developed economies facing an economic slowdown, and ongoing trade war concerns – investors appear complacent about protecting their portfolios from a downturn.

Volatility has a negative correlation to equities – and most other asset classes – so can be used to enhance returns, manage risk and potentially provide an additional source of alpha to an investment portfolio.

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