Minimum variance – a differentiated analysis of crowding, valuation, interest rate sensitivity and further questions

Risk based strategies, such as minimum variance, have been established as efficient building blocks in portfolio construction. Yet critics question their added value. OLZ addresses the various points of criticism in this research note and shows why it is worthwhile in the long term for investors to focus on optimal diversification and risk management – even when outperformance is not expected during a phase of unusually low market volatility, as in the second half of 2016.

OLZ Research Note 01/2017