Practical Applications of International Low-Risk Investing

Abstract

Low-risk equals low return; high-risk equals high return. That traditional view has been debunked by academic research showing that a portfolio of low-risk stocks outperforms a portfolio of high-risk stocks, particularly in the US equity market. It has led to increasing interest in low-risk investing strategies by risk-averse institutional investors.

Does this result hold for all international markets? Which low-risk strategy works best? This article pushes the research forward by investigating different sectors, countries and correlations of three low-risk strategies. In this report, the author offers some useful starting points for international investors.

Christian Walkshäusl , Associate Professor of Finance at the University of Regensburg in Germany, offers some useful starting points for international investors.