Wealthfront Launches Risk Parity Strategy Designed To Replicate Bridgewater's All Weather Fund - iCrowdNewswire
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Feb 23, 2018 8:20 AM ET

Wealthfront Launches Risk Parity Strategy Designed To Replicate Bridgewater’s All Weather Fund

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iCrowdNewswire - Feb 23, 2018

The Company Launches its Fourth PassivePlusⓇ Investment Feature and Becomes the Only Automated Advisor to Offer its own Risk Parity fund

REDWOOD CITY, Calif.,  — Today, Wealthfront launched Risk Parity, the latest addition to PassivePlus, the company’s signature suite of investment features. PassivePlus represents Wealthfront’s collection of academically proven, time tested rules-based strategies that seek to increase clients’ net of fee, after-tax returns, while maintaining their same level of risk. Risk Parity joins Wealthfront’s previous PassivePlus features, daily tax-loss harvesting, stock-level tax-loss harvesting and Smart Beta as impactful capabilities.


“Wealthfront’s PassivePlus marries decades of academic insights with technology to deliver a disciplined investment approach that helps our clients achieve their financial goals,” said Dr. Jakub Jurek, Wealthfront’s Vice President of Research. “Our launch of Risk Parity demonstrates that even the most sophisticated strategies can be deployed via software in a cost-effective manner.” 

Bridgewater Associates built the world’s largest hedge fund, aided by its creation of the risk parity strategy in its All Weather Fund, which launched in 1996. The strategy gained momentum based on its strong relative performance during the 2008 financial crisis. But the firm’s account minimum of $100 million limited the availability of its risk parity strategy to the ultra-wealthy and institutional investors. True to form, Wealthfront’s PhDs and engineers developed a software-based approach designed to replicate Bridgewater’s risk parity strategy, while keeping costs to the investor as low as possible.

“Most academics appreciate the benefits that broad diversification can bring, yet time and time again most investors fail to take advantage of the full benefit,” said Dr. Burton Malkiel, Wealthfront’s Chief Investment Officer and renowned economist. “The addition of Risk Parity takes diversification to the next level with a cost-effective, rules-based strategy. It aims to offer our clients more consistent returns during uncertain economic times. I am proud we’ve been able to offer it at a low cost to our clients.”

Wealthfront is proud to be the only automated advisor to offer comprehensive financial planning, its unique suite of PassivePlus® investment features and banking-related services all through the convenience of a mobile app. The company offers each service for a fraction of what the traditional industry charges and intends to expand on these areas to deliver even more value to their clients over time. This announcement comes on the heels of Wealthfront’s recent $75 million capital raise, bringing in Tiger Global Management as a new lead investor and the addition to home planning for Path. Wealthfront doubled its assets under management in 2017 and currently manages over $10 billion.


The Wealthfront Risk Parity Fund is managed by WFAS LLC, a SEC registered investment adviser and a wholly owned subsidiary of Wealthfront Inc.  Northern Lights Distributors, LLC, a member of FINRA and SIPC, serves as the principal distributor for the Fund.  Northern Lights Distributors, LLC is not affiliated with WFAS LLC or Wealthfront, Inc.

Before investing in the Wealthfront Risk Parity Fund, you should carefully consider the Fund’s investment objectives, risks, fees and expenses. This and other information can be found in the Fund’s prospectus. Please read the fund prospectus or summary prospectus carefully before investing.   Investing in securities and mutual funds involves the risk of loss.

Investments in Mutual Funds involve risk including possible loss of principal.  There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.  The Adviser’s assessment regarding the risk and correlation of the various asset classes and the Fund’s exposure to leverage through the use of derivatives may prove to be incorrect and may not produce the desired results.  Models and Data are used to construct sets of transactions and investments and to provide risk management insights.  The Fund may be exposed to additional risks when Models and Data prove to be incorrect or incomplete.  As a new fund, there can be no assurance that the Fund will grow to or maintain an economically viable size, in which case it could ultimately liquidate.  Overall equity market risk, including volatility, may affect the value of individual instruments in which the Fund invests.

PassivePlus® is a registered trademark and property of CSSC Investment Advisory Services, Inc. (“CSSC”) and is used under license. CSSC and Wealthfront are not affiliated companies.

Financial advisory services are offered by Wealthfront, Inc., a SEC-registered investment advisor. Brokerage products and services are offered by Wealthfront Brokerage Corporation, member FINRA / SIPC, and a wholly-owned subsidiary of Wealthfront, Inc. Please see our Full Disclosure for important details.

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