Post by AlternativeSoft

🔴 Hedge funds just suffered their worst drawdowns since "Liberation Day." Surging oil prices. Spiking bond yields. Equity selloffs. Markets reacted hard to the escalation in Iran — and even sophisticated multi-strategy funds felt the pressure. But here's what the headlines miss: the system held. No forced liquidations. No systemic de-grossing. The funds with the right tools and frameworks in place repositioned rapidly — and came out the other side intact. So why did some portfolios hold up while others didn't? The answer comes down to portfolio construction. In periods of extreme stress, correlations rise. Diversification assumptions break down. Strategy labels become meaningless. What actually matters is whether you truly understand: ✅ Factor-level exposures — not just strategy names ✅ How correlations shift under stress — not just in calm markets ✅ Which positions amplify risk vs. absorb it As Ray Dalio has long argued, diversification is the only free lunch in investing. But achieving real diversification today requires precision analytics — not spreadsheets. We've written about what this moment reveals about the future of portfolio construction. Read the full article: https://lnkd.in/eN46xVis #HedgeFunds #AlternativeInvestments #PortfolioConstruction #RiskManagement #AlternativeSoft J.P. Morgan Bridgewater Associates