FANG Stocks Expose Blind Spots in Risk Models

The investing industry is constantly devising new acronyms and buzzwords. Sometimes these can be dangerous. The rise of the FANG stocks highlights how clusters of stocks may create investing hazards that standard risk models struggle to detect.

Equity investors rely on various risk models to protect portfolios from a range of threats. Standard models generally focus on factors that affect performance, such as style, sector, country and currency