Many investors are surprised to learn that a typical 60/40 stock-bond mix has 85% of its underlying risk concentrated in the 60% of the portfolio allocated to equities. Taking inspiration from the All Weather Portfolio popularized by Bridegwater Capital's Ray Dalio, the RPAR Risk Parity ETF (RPAR) spreads risk evenly across a portfolio comprised of four different asset classes. The objective is simple: deliver risk-adjusted outperformance across an entire market cycle and through all market environments. So far, RPAR has gathered assets at an impressive clip - no doubt a result of its impressive performance throughout the current market turmoil. The managers behind one of the most successful ETF launches of the past year (RPAR) join Let's Talk ETFs to explain exactly what makes their fund tick.
Show notes

5:00 - RPAR Risk Parity ETF (RPAR): A bird's eye view of the strategy underlying the fund

6:30 - What is the history of this type of strategy's performance?

8:00 - How is your fund different from the All Weather Portfolio popularized by Bridgewater Capital's Ray Dalio?

10:00 - RPAR: A "True" risk parity strategy

15:00 - Why is this not exactly an index fund?

20:45 - On duration risk: Why the strategy always invests in longer duration treasuries?

25:00 - Dealing with a rising rate environment

26:15 - Relative to a 60/40 mix what would the standard deviation of RPAR be?

27:00 - What's the maximum drawdown an investor in the fund could expect?

31:30 - Specific holdings: (BAR) versus (GLD) for physical gold exposure

35:00 - Why individual companies versus an ETF for commodity producers exposure? 

40:00 - What are the top equity positions?

42:00 - Is the fund meant to be a core or a satellite portfolio holding?

45:30 - Who is buying RPAR? Retail versus institutional investors

50:00 - The current macro outlook - and why risk parity makes sense no matter your point of view


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