SPY - RPAR Risk Parity ETF: The Path To 8% Annual Returns Or More

2025-02-20 09:00:00 ET

Summary

• My track record on multi-asset class investing has been poor, but I believe RPAR could deliver high-single digit to low-double digit returns annually over the next decade.
• RPAR's strategy involves leveraging a diversified portfolio of low-correlation assets, balancing risk by investing more in low-volatility assets.
• Despite recent poor performance due to a massive bond bear market, historical data and CAPM suggest future returns could improve to around 8% annually or more.
• Investing in RPAR today offers a sensible risk-reward balance compared to single-asset bets, despite past underperformance.

There is no sugar-coating it: my track record on multi-asset class and diversified investing has been dismal in the past five years. I first issued a "strong buy" rating on the RPAR Risk Parity ETF ( RPAR ) in July 2020. Since then, distributions included, the fund has remained flat (i.e., no meaningful gains or losses) while the S&P 500 ( SPY ) doubled in value, as depicted below....

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