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Are low-volatility returns too good to be true?

An investor will have to determine whether the underlying strategy is really low risk

The marketing pitch is familiar: why suffer market volatility when you can make (5/8/10/12 per cent p.a., take your pick). This sounds enticing in the midst of the current escalating US-China trade war. The majority of these funds show past performance as a near-straight upward sloping line.

STARTING in 1990, an exclusive investment fund produced an enviable track record. Over the next 18 years, it would return 11 per cent per annum (p.a.) Even better, during this long track record, its worst performing month was -0.64 per cent. On average the fund had one negative month per year....

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