Careers Contact Us Search
Insights & Education  /  Insights

The Do’s and Don’ts when Adding Low-Correlating Strategies

July 2022

Investors using alternatives for diversification should consider low-correlating strategies that can move independently from stocks and bonds. These strategies have the potential to create a smoother ride and provide a more consistent outcome.


Below are some do’s and don’ts to consider when incorporating low-correlating strategies.

Green checkmark

DO:

  • Understand correlations among your core holdings
  • Be clear on why you own it and the outcome you’re trying to achieve
  • Allocate enough to make a difference. It’s unlikely marginal tweaks would have a meaningful impact
  • Allocate to a sleeve of multiple strategies to address different market concerns
  • Know your alternatives managers

 

Red X mark

DON’T:

  • Lose sight of risk management
  • Try to time market cycles
  • Sell low-correlating strategies when the stock market is outperforming
  • Go exclusively for the lowest cost provider
  • Invest based solely on a back-tested hypothetical, track record

 

Why You Should Care About Correlation >

 

The Fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 1.855.LCFUNDS, or visiting www.LoCorrFunds.com. Read it carefully before investing.

Click here for important disclosure and definition information.