After the market convulsions in 2022 - double-digit losses for bonds and equities, supply chain disruptions caused by the war in Ukraine, and interest rate rises - last year brought a turnaround in equity markets. Driven by risk taking and a handful of stocks, the rally led to positive double-digit performance in global markets, but it produced relative headwinds for many types of investors, including those that employ the low volatility style.

This is according to the recent TDAM Low Volatility Investing: Year in Review and Look Ahead article, which unpacks last year's low volatility environment and offers reflections on what investors should keep in mind this year.

Risk-on rallying types of environments like 2023 are challenging for low volatility strategies, which primarily invest in stable non-cyclical companies. Low volatility strategies are designed take advantage of the low volatility anomaly and are constructed to have less risk than that of a capitalization-weighted benchmark without sacrificing long-term returns. As a result, low volatility strategies tend to lag in strong upward moving markets, and they lag even more so when those markets are fueled by increased risk taking. 在较长的投资周期中，低波动策略往往在股票市场不利的情况下，为投资者创造更可观的相对收益。

Investors may be tempted to take advantage of the recent stock market rebound in the hope that it will continue. However, the phenomenon of a meteoric increase in market concentration in a handful of volatile and expensive securities, which is behind this recent surge, is the same phenomenon that makes markets extremely vulnerable. This same phenomenon took place in 2020 and ended in the double-digit market declines of 2022. Unlike 2020 though, today interest rates are significantly higher and their definitive impact remains to be seen.

This is why building a more diversified portfolio, staying away from the excesses of capitalization-weighted indices, and being attentive to the valuation and quality of the securities purchased are all measures that are even more essential today than they were a year ago.

For more detail, read the full article.

_{本文所包含的信息仅供参考。信息出自我们认为可靠的来源。本信息并未提供财务、法律、税务或投资建议。 Particular investment, tax or trading strategies should be evaluated relative to each individual's objectives and risk tolerance.}

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_{这些资料中对证券或市场状况的任何一般性讨论或意见均代表着我们或所引用来源的观点。除非另有说明，否则这些观点仅为所注明日期当时的观点，并有可能发生改变。有关投资组合持仓、资产配置或分散投资的信息是基于历史数据的，可能会随时变化。}

_{This document may contain forward-looking statements ("FLS"). FLS反映了基于目前可用数据对未来事件和/或结果的当前期望和预测。由于可能会发生在构想时未预料或未考虑到的事件，导致实际结果与明示或暗示的结果大相径庭，因此这类预期和预测在未来可能被证明是错误的。FLS并不保证未来的表现，建议不要过度依赖FLS。}

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