Risk-protecting strategies seen adding to wild market swings

New York

ON Wall Street, a cure is proving to be as nearly as bad as the disease.

Investment strategies that promise to insulate investors from risk are being seen as actually having contributed to the wild market swings in recent weeks.

That seemingly upside-down outcome follows an explosion in investments aimed at avoiding pratfalls in the market, as opposed to making direct bets on a company, asset class or theme, and has become an investment rage in recent years.

Their popularity boomed after global central banks pumped trillions of dollars into asset markets in a bid to spur economic growth.

Now, however, some experts warn that the sums that have flowed into so-called risk-parity funds and exchange-traded funds, or ETFs, over t…