Long volatility investment strategies primer

December 2024

Investors can have various definitions for what “risk” means to them, and they may use different tools to manage that risk.

Meketa views long volatility strategies as one “tool in the toolbox” for investors as defense against sharp, quick drawdowns in global markets. These tools may serve as the first line of defense during the initial stages of a market shock and may be part of a broader allocation to risk mitigating strategies (RMS).

In this paper, we explore long volatility strategies through a variety of lenses, including how they work, how investment managers build strategies, how they have performed, portfolio use-cases, their role within an RMS framework, and more.