Investors have traditionally used asset allocation as a way to maximize risk-adjusted returns, but in the three most recent market crises: Tech Bubble burst, Global Financial Crisis (GFC) and the COVID-19 crisis, most growth asset classes became highly correlated, reducing their diversification benefits.
Risk-mitigation strategies (RMS) have therefore become an important element of asset allocation decisions.
Since its inception in 1992, PGIM Quantitative Solutions' US Market Participation Strategy (MPS) has provided both upside participation in rising markets, and limited downside losses infalling markets.
MPS compares well with other RMS, including low volatility, options-based protection and hedged equity strategies that are commonly used for risk management, uncorrelated alpha and downside protection.
Using MPS as an equity or hedged equity substitute may provide higher risk-adjusted returns in a multi-asset portfolio; we offer MPS at a flat, asset based management fee, without carried interest or performance-based fees.