Risk assets around the world experienced chronic volatility throughout 2015, which appears to be spilling over to 2016. Given a host of factors, we do not expect this volatility to subside anytime soon.

The current environment, in our view, warrants focusing on return efficiency and allocating to low volatility strategies designed to maximize risk-adjusted returns. These strategies include long and short positions in equities, credit and currencies; the opportunistic pairing of long and short positions to isolate risks and defray carrying costs; and protective measures for sovereign debt exposure.

For a deeper dive into why we believe pursuing such strategies may help investors mitigate downside risks, smooth return profiles, increase portfolio efficiency and potentially achieve better risk-adjusted returns, read our paper Navigating Volatility in Pursuit of Efficient Returns.

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