The case for low-risk equity investing: evidence from 2011-2025
Raul Leote de Carvalho (BNP Paribas), et al.
July 2025
This paper investigates the performance of equity low-risk strategies since 2011, highlighting their ability to deliver strong risk-adjusted returns across diverse market conditions. We introduce a composite risk score that extends beyond volatility and demonstrate its effectiveness through empirical analysis. The study compares portfolio constructions, examines sector-level effects, and evaluates exposures to Fama-French factors. Results confirm the persistence of the low-risk anomaly and the presence of alpha unexplained by traditional risk premia, supporting the case for including low-risk strategies in long-term equity portfolios.

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Existing-home sales increased by 1.5% month-over-month in September, according to data from the National Association of Realtors. “As anticipated, falling mortgage rates are lifting home sales,” said NAR Chief Economist Dr. Lawrence Yun. “Improving housing affordability is also contributing to the increase in sales.” Mortgage rates have fallen to the lowest level in a year, below 6.2%.

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