Scientific Beta

ETF Stream: "While risk parity and equal risk contribution share the same basic objective of equal risk weighting, risk parity weights assets inversely to their volatility whereas the equal risk contribution method takes the covariance between assets into account to reduce overall portfolio risk through diversification. It requires a portfolio optimization tool to arrive at the solution. Several index providers have introduced index families around this concept including (...) Scientific Beta (EDHEC) and ETF launches include the Global X Scientific Beta US ETF which has reached $100 million in assets."

ETF Stream 06/06/2019

"(...) While risk parity and equal risk contribution share the same basic objective of equal risk weighting, risk parity weights assets inversely to their volatility whereas the equal risk contribution method takes the covariance between assets into account to reduce overall portfolio risk through diversification. It requires a portfolio optimization tool to arrive at the solution. Several index providers have introduced index families around this concept including (...) Scientific Beta (EDHEC) and ETF launches include the Global X Scientific Beta US ETF which has reached $100 million in assets. (...)"