How BlueRocke Assists Accountants & their Clients

P&A Connect

Here at BlueRocke we work with Accountants to support new Australians in their wealth creation.  Over the past 10 years we have assisted Peter Chan and Andrew Wong at P&A Connect Accountants and Advisors with many of their clients who are busy medical professionals and business owners,  around building and protecting their wealth using diverse long term investment and insurance strategies.  This partnership means that clients’ wealth is built to levels higher than the would be on their own.  They are reassured that they and their families are well provided for and can navigate the Australian financial systems better together.

With over 35 years Global financial experience and 10 years local knowledge, Dev Sarker can be your partner in assisting new Australians create wealth and keep clients for longer.  Contact Dev today at


Hedging for Different Market Scenarios

Hedging for Different Market Scenarios

A look at specific strategies, and their trade-offs, for diversifying equity risk.

More investors are considering broadening their approach to diversifying equity risk to include strategies such as long duration bonds, managed futures, alternative risk premia, and tail risk hedging. However, it’s important for investors to know in what types of environments each strategy is more likely to work and in what environments each are likely to be less effective.

What this chart shows

Not every type of risk-mitigating strategy can be expected to work in every type of market sell-off.

  • High quality sovereign bonds, such as long duration U.S. Treasuries, have historically been an effective hedge during flight-to-quality episodes, but can incur negative returns if interest rates rise faster than consensus expectations.
  • Trend-following strategies have historically performed well in trending markets and could pair well with long duration bonds (for example,  the trend-follower can reduce interest rate risk by shorting rates during a sustained sell-off in rates), but are susceptible to rapid reversals in trends.
  • Alternative risk premia strategies may enhance a trend-following/long duration bonds combination further, as they have the potential to do well in non-trending markets and can act as an uncorrelated return driver. But they can be vulnerable to parallel drawdowns in multiple risk premia, however uncommon these might be.
  • Tail risk hedging may offer a higher degree of reliability, albeit at the expense of short-term return potential. In contrast to the approaches above, tail risk hedging is based on contractual derivatives – not correlations, which can break. And contrary to conventional wisdom, tail risk hedges do not always have a negative expected return or a cost associated with them.

What it means for investors

There is no “silver bullet” strategy to hedge an investor’s portfolio from risk events. We believe that investors should “diversify their diversifiers” by identifying the ideal blend of correlation-based hedges and outright hedges for their unique circumstances.

Source: PIMCO