What is Risk Parity?

Risk Parity is part of our PassivePlus® signature suite of investment features. By balancing your risk more intelligently, Risk Parity aims to increase your risk-adjusted returns in a wide range of market environments.

Pioneered by Bridgewater Associates, the largest hedge fund in the world, risk parity investment strategies are predominantly available to institutional investors (e.g., endowments, pensions, insurance companies, etc.). Net-of-fees, Bridgewater’s risk parity strategy, known as the All Weather Fund, outperformed the return of a portfolio with comparable risk (60% stocks/40% bonds) by an average of 0.6% per year over the past 20 years.

Wealthfront offers its own version of Risk Parity for taxable investment accounts with $100,000 or more. Learn more about how this strategy works.

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The Wealthfront Risk Parity Fund (the “Fund”) is managed by WFAS LLC, a registered investment adviser and a wholly owned subsidiary of Wealthfront, Inc. WFAS LLC receives an annual management fee equal to 0.50% of the Fund’s average daily net assets. Northern Lights Distributors LLC a member FINRA/ SIPC serves as the principal distributor for the Fund.

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. In order to add the Wealthfront Risk Parity Fund, we must rebalance your portfolio. As part of this process, if we sell positions at a gain, and you do not have sufficient harvested losses to offset those gains, you’ll pay taxes on the net gain.

There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.