riskparity strategies that aim to maximize diversification across asset classes appear to have lost their appeal at a time when every asset class has suffered due to persisting global volatility what happened the 11 billion rpar risk parity etf rpar has lost over 32 from its november 2021 high according to a bloomberg report this is a record drawdown the report said the fund has lost more than 28 since the beginning of the year see also why alibaba nio and other stocks are shooting up for now in hong kong today based on volatility these strategies allocate funds among all asset classes taking an equal amount of risk in each however risk parity tactics failed this year as both stocks and bonds suffered from the us federal reserves aggressive rate hikes in its effort to control inflation expert take todd sohn etf strategist at strategas securities told bloomberg it’s supposed to be a diversified fund holding major asset classes stocksbondsgoldtips to basically ‘weather’ when volatility hits one of the asset classes “but we are in this environment with inflation still high and bond yields now making multidecade highs that no one has experienced in 40 years” sohn said jeffrey gundlach chief investment officer of doubleline capital tweeted “the nasdaq total return ytd is 3036 and the long maturity ust etf is 3094 “risk parity” is clearly not working out so far this year”