What Is Convexity Tail Hedging?

As discussed in our November Market Perspective, an increased frequency of low multi-year annualized returns and large drawdowns has reduced the effectiveness of long-term fixed income as a risk-reducing diversifier. This is causing many investors to seek reliable hedges to equity market volatility that can replace or compliment fixed income in that role. We believe that index option-based tail risk hedging focused on convex payoffs is a compelling solution. Please read Convexity: A Powerful and Customizable Approach to Tail Risk Hedging to learn more.

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