Tail Risk Investing

There was an interesting article in the Economist magazine about tail risk investing.  There are some hedge funds that buy assets that should rise in market sell-offs.  These funds lose about 15% in a normal year.  When the market loses a lot of value, then returns average 50% to 100%.  Buyside firms like Black Rock and PIMCO and sellside firms such as Deutsche Bank have tail risk products.  Deutsche Bank has created the Equity Long Volatility Investment Strategy (ELVIS) index.  This index generates positive returns when market volatility is high.