Investing in volatility

Following sharp correc­tions in the equity ­markets over the past few years, investors are increasingly looking for ways to mitigate their investment portfolios against market crashes. Some have moved their money into capital protected structures that promise to return 100% of the capital invested (subject to the credit risk of the issuer), if the holder can wait until the maturity of the product. However, others are looking at more dynamic solutions by diversifying their investment into assets with a low or negative correlation to equity markets. Portfolio diversification is not a ne...