A popular asset allocation strategy promoted by hedge funds, includingBridgewater Associates'Ray Dalio, is reportedly facing investor redemptions after underperforming promises.
What Happened:Bridgewater and other hedge funds promised superior returns with their "risk-parity portfolios," but after half a decade of subpar performance, investors are pulling their money out, Bloomberg reported.
Large investors, including public pension funds in New Mexico, Oregon, and Ohio, have withdrawn their investments, leading to a $70 billion decline in these funds from their peak three years ago. This comes despite reassurances from hedge funds that things could improve in the next decade.
Risk parity...