Category Archives: Financial risk management

Milliman FRM Insight: January 2019 Market Commentary

In the life of the U.S. economy and its financial markets, 2019 was in many ways an exceptional year. The S&P 500 returned 31.5%, its second-best return of the last 20 years. Milliman’s Joe Becker offers more perspective in this month’s market commentary. Download the full commentary at MRIC.com.

Milliman FRM Insight: December 2019 Market Commentary

The global equity market in November posted its third consecutive monthly return of more than 2% and its ninth positive monthly return for 2019. From its 2018 low on December 24, the S&P Global 1200 Index has generated a total return of 29.3% through the end of November, reaching a new all-time high on November 27. Milliman’s Joe Becker offers more perspective in this month’s market commentary. Download the full commentary at MRIC.com.

Milliman FRM Insight: November 2019 Market Commentary

The global equity market in October notched its second consecutive monthly return of more than 2% and its eighth positive monthly return for 2019. Since touching its 2018 low on December 24, the S&P Global 1200 Index has generated a total return of 26.3% through the end of October. That strong return notwithstanding, the index finished the month still just shy of the all-time it hit in January 2018. Milliman’s Joe Becker offers more perspective in this month’s market commentary. Download the full commentary at MRIC.com.

A closer look at volatility control funds and their place in the financial market ecosystem

Market observers have posited in recent years that Volatility Control (VC) funds represent a focal point of instability for financial markets. Their contention is that VC funds create a market feedback loop by selling equities when volatility is high, which in turn pushes volatility higher, triggering more selling. The implication is that VC funds will eventually be the source of the next 1987-style selloff. At first glance, the idea seems feasible; in practice, however, it fails to consider a number of important factors. Milliman’s Joe Becker providers more perspective in this report.

Milliman FRM Insight: September 2019 Market Commentary

Global equities notched their worst month of the summer amidst heightened volatility. After touching the all-time high on July 26, the selloff that began in the last week of July accelerated into August, pushing the S&P 500 lower for six consecutive days by a total of 6%. For the entirety of the month the S&P vacillated in a 3% range, rising and falling with each new piece of trade-related news. Equities outside the United States offered no haven as both developed and emerging markets declined, exacerbated by a strengthening U.S. dollar. The volatility of the S&P 500 began the month below the 18% volatility threshold of the S&P Managed Risk Index, but quickly moved above it in early August. The price of oil fell for the third straight month as prospects of limited demand were met with growing supply.

Milliman’s Joe Becker offers more perspective in this month’s market commentary. Download the full commentary at MRIC.com.