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Minimum variance indexing—an antidote for the seasick

By: Tom Goodwin, Senior Research Director

In a world where significant market volatility and drawdowns have become common-place, market participants are eager to find a means of maintaining equity market exposure while attempting to save themselves from the motion sickness associated with wild market swings. The minimum variance approach is one of several indexing options for risk/volatility reduction and is designed specifically to reduce volatility/risk at the index level.