a) the correlation isn't perfectly, -1, and never has been. An up day for stocks isn't automatically a down day for bonds, and vice versa. b) correlations change. Last years correlation estimate isn't a perfect predictor of next years. c) Correlation is a linear estimate of the relationship between two variables. It's perfectly possible to have a negative correlation, but positive correlation in the lower tail (eg both sell off sharply together) d) "Risk parity" funds holding both stocks and bonds e) Any other fund doing volatility targeting. GAT