Milliman Protection Strategy: Saving pension plans by reducing downside risk
Since the early 1950s, most attempts at managing portfolio risk have relied heavily on asset allocation—diversifying exposure among asset classes that have exhibited historically low correlation to one another. This approach has proven to be less effective during major downturns. In 2008, for example, nearly every major asset class was affected by the global economic downturn.
The high correlation among many of the world’s major asset classes was likely not a black swan event, but rather the inherent reaction of ever-more-connected global economies.
The declining effectiveness of conventional risk management and the introduction of new risk management strategies have the potential to transform the way people manage risk and save for retirement.
The Milliman Protection Strategy™ aims to stabilize the volatility of an investment portfolio during periods of significant and sustained market declines, providing investors with the same risk management techniques used by major financial institutions around the world.
Recipients must make their own independent decisions regarding any strategies or securities or financial instruments mentioned herein.
The products or services described or referenced herein may not be suitable or appropriate for the recipient. Many of the products and services described or referenced herein involve significant risks, and the recipient should not make any decision or enter into any transaction unless the recipient has fully understood all such risks and has independently determined that such decisions or transactions are appropriate for the recipient.
Any discussion of risks contained herein with respect to any product or service should not be considered to be a disclosure of all risks or a complete discussion of the risks involved. The recipient should not construe any of the material contained herein as investment, hedging, trading, legal, regulatory, tax, accounting or other advice. The recipient should not act on any information in this document without consulting its investment, hedging, trading, legal, regulatory, tax, accounting and other advisors.