Retirement Fund Expert Ren-Yuan Cheng Discussed Investment Risk Resonance at Yuan Ze University

Amid global financial market volatility, investors faced increasing challenges in managing assets amid the ups and downs of capital markets. In response to Taiwan’s push to establish an Asian asset management hub, the College of Management at Yuan Ze University specially invited Ren-Yuan Cheng, Senior Advisor for Investment Strategy and Business at Fidelity Investments Greater China and renowned as the “Father of Target Date Funds,” to deliver a keynote lecture. He analyzed the historical evolution of systemic investment risk, attracting numerous students and faculty.

Cheng pointed out that in today’s highly interconnected world of the internet and financial technology, interactions between markets had long surpassed traditional assumptions. Previously, financial models were largely based on the premise that returns followed a Gaussian distribution, but frequent extreme events in modern markets indicated that this assumption no longer captured actual risk structures. With global capital flows and information networks becoming increasingly synchronized, markets experienced resonance effects, amplifying volatility and making extreme phenomena more common—potentially becoming the new normal in financial markets.

Cheng emphasized that an individual’s optimal strategy was not necessarily the system’s optimal strategy. When behaviors converged across market participants, market resilience significantly decreased. This analogy vividly illustrated the modern financial system phenomenon of “collective rationality but systemic imbalance.” He further noted that the core of all asset allocation lay in risk control; even the strongest theoretical models could only provide a “necessary condition” analysis of risk, not a “sufficient condition” for fully predicting it. For example, during a stock market bubble, correlations between different asset returns may simultaneously rise and risk indicators reach high alert levels, yet whether the market would actually experience a return reversal or bubble burst could not be precisely predicted by models.

Cheng previously served as Chief Investment Officer of Fidelity Investments’ Global Asset Allocation Team and founded the world’s first Target Date Fund. His contributions to retirement investment systems and risk management have received international recognition. This lecture not only broadened students’ understanding of financial markets but also highlighted Yuan Ze University’s commitment to integrating financial research with practical application.