Rocaton carefully examines sources of over and underperformance using proprietary and third party analytics.  We often work with clients to develop a “risk budget” that defines their investment program’s tolerance for risk on a total portfolio basis.  The risk budget allocates expected risk across asset classes and managers to seek maximum expected return for risk taken.

 

Examples of risks that we may consider in this process are: Inflation Risk, Interest Rate Risk, Credit Spread Risk, Equity Market Risk, Commodity Risk, Illiquidity Risk and Currency Risk