Absolute return strategies provide investment opportunities independent from traditional sources of risk. These strategies go long attractive opportunities across the capital markets, and short unattractive opportunities. In this video, QMA’s Global Multi-Asset Solutions (GMS) team discusses how systematic absolute return strategies offer a smart way to diversify portfolios. These strategies benefit from two sources of return: behavioral mispricing and sources of economic risks that are not generally accessible, such as currency carry. These sources diversify the portfolio’s source of return away from traditional asset classes into new market neutral opportunities. The GMS team also discusses how risk budgeting is an active investment decision when investing in systematic absolute return strategies, and the three things to consider when investing in these strategies.