Sat, May 28, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

PIMCO’s Vineer Bhansali discusses 'Tail Risk Hedging’

Friday, April 19, 2013

From Komfie Manalo, Opalesque Asia:

According to Vineer Bhansali, managing director and portfolio manager, head of quantitative investment portfolios and a member of the asset allocation committee at PIMCO, it pays to be countercyclical in the context of tail risk hedging.

Speaking to Sona Blessing on Opalesque Radio, Bhansali elaborates on the trade-off between the cost of protection and securing returns, and instruments in the tool box that can be set up as hedges against political risk.

He says the main reason for countercyclical tail risk hedging is "because the prices of tail risk hedging move inversely to how the markets are doing. So when markets are falling and volatilities are high and everybody wants to buy tail risk protection - that is usually the worst time to be buying tail risk protection because it is very expensive. It actually makes more sense to be buying risky assets [then] because everybody else is selling risky assets. On the other hand when markets are rallying, for example equity markets have been up over 15% in the last 12 months or so, everybody forgets the last crisis and the price of protection falls. That is usually the best time to buy protection."

Bhansali shares that PIMCO’s tool kit is quite broad and when they think of tail risk hedging they are not always thinking of buying options.......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Performance - Hedge fund ETFs take a battering, Have long-short credit funds delivered?[more]

    Hedge fund ETFs take a battering From ETFStrategy.co.uk: It was a blow for the hedge fund world when Hillary Clinton’s son-in-law Marc Mezvinsky announced he would be closing his Greek-focused fund after it plummeted in value by 90%, just two years after it launched. For passive investor

  2. Ares Capital to buy American Capital in $3.4 billion deal[more]

    From PIOnline.com: Ares Management's business development company Ares Capital Corp. is buying troubled BDC American Capital for $3.43 billion, said a joint news release by the BDCs and another release by Ares Management. Ares Capital Corp.'s assets are expected to grow to about $13.2 billion when t

  3. Launches - Man Group and American Beacon launch new emerging debt fund, Nikko AM launches new Japan equity UCITS fund[more]

    Man Group and American Beacon launch new emerging debt fund American Beacon Advisors, an experienced provider of investment advisory services to institutional and retail markets, launched the American Beacon GLG Total Return Fund today. The Fund became effective May 20. The America

  4. Emerging markets hedge funds perform strongly, but capital base erodes[more]

    Komfie Manalo, Opalesque Asia: Latin American Emerging Markets and Russian hedge funds lead industry gains in the first months of 2016, posting strong performances through April as global and EM equity, commodity and currency markets surged in recent weeks following steep losses to begin the year

  5. Americas - Australian banks sending U.S. hedge funds broke, Ryan Puerto Rico ‘rescue’ bill could be windfall for hedge funds[more]

    Australian banks sending U.S. hedge funds broke From SMH.com.au: US hedge funds are not having the best of years. Profits are hard to find, they're underperforming and the punters are losing patience, withdrawing US$15 billion ($20.8 billion) in the March quarter. They're expected to wit