Understanding Wealthfront Risk Parity Fund Returns and Risk

Wealthfront's Risk Parity Fund is an investment strategy that aims to balance risk across different asset classes, rather than focusing on maximizing returns. This approach can help investors feel more confident in their investments, even during times of market volatility.

The fund uses a risk parity approach, which means that it allocates assets based on their risk levels, rather than their potential returns. This can lead to a more diversified portfolio, which can help reduce overall risk.

One key benefit of the Risk Parity Fund is that it can help investors avoid the pitfalls of traditional investing, where a focus on returns can lead to over-investment in high-risk assets. By balancing risk across the portfolio, the fund can help investors achieve their long-term financial goals while minimizing the risk of significant losses.

When looking at the operational fees associated with Wealthfront Risk Parity (WFRPX), it's essential to understand the different components that make up the total expense ratio.

The expense ratio for WFRPX is 0.25%, which is considered low compared to other funds.

This low expense ratio is a result of the fund's efficient operations, allowing more of your investment to go towards your goals.

The management fee for WFRPX is 0.24% of the fund's assets under management (AUM), which is a significant cost factor.

Here's a breakdown of the operational fees for WFRPX:

The low expense ratio and management fee make WFRPX a cost-effective option for investors.

The Wealthfront Risk Parity Fund (WFRPX) has had its ups and downs since its inception. Its compound annualized total return from 01/22/2018 to 01/03/2025 is -1%.

Over the past 1 year, WFRPX has seen a 2.1% annualized return. This is a decent performance considering the overall market volatility.

The fund has experienced a maximum drawdown of 42.8% since 01/22/2018. This is a significant drop, but it's essential to remember that drawdowns are a natural part of investing.

WFRPX's Sharpe Ratio, which measures risk-adjusted return, is -0.19. This indicates that the fund's returns have not been sufficient to compensate for its volatility.

Here's a breakdown of WFRPX's annualized returns over the past few years:

The fund's annualized return has been negative over the past 5 years, with a -1.0% return since 01/22/2018. However, it's essential to consider the overall market conditions and the fund's performance relative to its category.

Wealthfront Risk Parity Fund (WFRPX) has a dividend yield of 4.37% as of the latest available data.

The fund's dividend growth in the last 12 months is -18.81%, indicating a decline in dividend payments.

The trailing 12-month yield of Wealthfront Risk Parity Fund is 4.00%, which is a significant percentage of the fund's total return.

Wealthfront Risk Parity Fund has been paying dividends quarterly, with the most recent payment in December 2024 amounting to $0.097 per share.

Here's a breakdown of the fund's dividend history:

The fund's dividend yield has been increasing over the past few years, with a yield of 5.20% in 2024 and 4.86% in 2023.

Wealthfront Risk Parity Fund has a dividend distribution frequency of quarterly, with the most recent distribution in December 2024.

The fund's net income ratio is 0.21%, indicating that a small portion of the fund's income is distributed as dividends.

Here's a summary of the fund's dividend distribution frequency:

The Wealthfront Risk Parity Fund Class W has a current volatility of 1.44%, which is the average percentage change in the investment's value over the past month.

This level of volatility may be relatively low compared to other investments, but it's essential to understand that it can still fluctuate.

The chart below shows the rolling one-month volatility, giving you a clear visual representation of the fund's past performance.

The Sharpe ratio is a measure of an investment's historical performance in terms of risk-adjusted returns. It's calculated based on past 1 year of trading data, taking into account price changes and dividends.

The current Wealthfront Risk Parity Fund Class W Sharpe ratio is 0.21, which is a relatively low value. This indicates that the fund has not provided strong risk-adjusted returns in the past year.

To better understand the Sharpe ratio of Wealthfront Risk Parity Fund Class W, you can compare it to a selected benchmark using a chart. This will provide valuable insights into the investment's performance.

The Sharpe ratio tool allows for fine-grained control over the calculation options, giving you more flexibility to analyze the data.

Volatility is a measure of how much the value of an investment can fluctuate up or down over a given period of time. The current Wealthfront Risk Parity Fund Class W volatility is 1.44%, representing the average percentage change in the investment's value over the past month.

This level of volatility may not be alarming, but it's essential to understand that it can still impact your portfolio. To put it into perspective, a 1.44% change in value may not seem like a lot, but it can add up over time, especially if you're investing a significant amount of money.

A good way to visualize volatility is to look at the rolling one-month volatility chart, which shows the fluctuations in the investment's value over time. This chart can help you see how the investment has performed in the past and may give you an idea of what to expect in the future.

It's worth noting that volatility can be influenced by various factors, including market conditions, economic trends, and even investor sentiment. As an investor, it's crucial to stay informed and make informed decisions based on your risk tolerance and investment goals.

Wealthfront Risk Parity's holdings and concentration metrics offer valuable insights into the fund's investment strategy. The fund's net assets are a substantial $1.29 billion.

The number of holdings is relatively modest at 122, but this is still a significant increase from the category low of 2 holdings. This suggests that the fund's managers are actively selecting a diverse range of investments.

Here's a breakdown of the fund's concentration metrics:

The fund's top 10 holdings account for only 89.56% of its net assets, indicating a relatively diversified portfolio.

Let's take a closer look at the Concentration Analysis of WFRPX's holdings. The fund has a total of 122 holdings, which is a relatively concentrated portfolio.

The net assets of WFRPX are $1.29 billion, with a category rank of 30.67%. This means that WFRPX's net assets are significantly higher than the majority of funds in its category.

Here's a breakdown of WFRPX's holdings and their corresponding net assets:

The top 10 holdings of WFRPX account for a significant portion of the fund's net assets, with a weighting of 89.56%. This is a relatively high concentration of assets in the top 10 holdings.

The top 10 holdings are:

These holdings are a mix of bonds and other securities, and their concentrations are relatively high.

In our holdings, we have a significant allocation to cash and equivalents, which makes up 7.25% of our bond sector breakdown.

The cash and equivalents sector has a return low of 0.10% and a return high of 100.00%, indicating a wide range of possible returns.

We've also noticed that the corporate sector has a high return high of 99.90%, suggesting that it has the potential for significant returns.

The municipal sector, on the other hand, has a relatively low return high of 31.28%, indicating that it may not be as volatile.

Here's a breakdown of the bond sectors in our holdings:

The government sector has a return high of 98.64%, which is relatively high compared to other sectors.

As we dive into the holdings and concentration of a particular bond portfolio, it's interesting to see the geographic breakdown. The US makes up a significant 89.89% of the portfolio.

This means that nearly 90% of the bonds in the portfolio are from the US. The non-US portion is relatively small, at 0.00%.

Looking at the performance of the US and non-US bonds, we can see that the US bonds have had a wider range of returns, with a low of -177.12% and a high of 87.76%. In contrast, the non-US bonds had a lower return of -39.00% and a higher return of 137.36%.