Abstract
Long-term investors are usually very conservative in their asset allocations, investing the bulk of their portfolios in government bonds. What often deters them from including other assets is inherent portfolio risk. Many long-term investors, such as pension funds and sovereign wealth funds, have substantial liabilities that prevent them from making risky allocations. By opting for conservatism, however, they are also denying themselves the opportunity to invest in asset classes that earn higher returns over the long run.
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Brière, M., Burgues, A., Signori, O. (2010). Volatility as an Asset Class for Long-Term Investors. In: Berkelaar, A.B., Coche, J., Nyholm, K. (eds) Interest Rate Models, Asset Allocation and Quantitative Techniques for Central Banks and Sovereign Wealth Funds. Palgrave Macmillan, London. https://doi.org/10.1057/9780230251298_14
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DOI: https://doi.org/10.1057/9780230251298_14
Publisher Name: Palgrave Macmillan, London
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