Normality may be returning to the market, but investors have not forgotten how abnormal it can get. With market volatility falling to pre-crisis levels, hedge fund managers are launching funds that seek to make money from tail risk – the possibility of unforeseen high-impact events, named “black swans” after the eponymous book by Nassim Nicholas Taleb.

Research by alternatives manager Welton Investment Corporation into downside tail risk, based on 50 years of historical S&P 500 index data, shows that these events occurred five times more than predicted by the most popular statistical model.