Felix Goltz, PhD, Research Director | Eric Shirbini, PhD, Global Research and Investment Solutions Director, Scientific Beta
As the economy opens up and stimulus spending commences, the market is concerned about inflation fears. Using TIPS to aim for full hedging of inflation would have a high opportunity cost, especially with negative interest rates. Instead, investors can turn to their performance-seeking portfolio for long-run inflation protection. Equities are a natural candidate for this, since unlike commodities, they offer a positive long-term risk premium.
Currently, there are no passive equity products that provide exposure to macroeconomic risks such as inflation in a systematic fashion. We aim to fill this gap by developing indices for targeted macroeconomic exposure.
In this webinar, we present our equity inflation indices, the first in a series of targeted macroeconomic factor indices from Scientific Beta. The objective of these indices is to provide long-term equity performance with additional inflation protection compared to a traditional cap-weighted index. As a result, these indices are ideal candidates to replace cap-weight indices for investors with inflation fears and as equity components of a multi-asset portfolio that requires insulation against inflation shocks.
During this webinar we will cover the following topics:
– Reliable measurement of macroeconomic exposure (role of robust statistics and forward-looking information)
– Equity portfolios dedicated to inflation lead to stronger targeted inflation-surprise exposures compared to a factor or sector allocation approach
– Inflation indices can protect against future inflation shocks while earning the long-term equity risk premium
– Comparison of the conditional performance of equity inflation strategies with that of other asset classes
Felix Goltz, PhD, Research Director, Scientific Beta
Eric Shirbini, PhD, Global Research and Investment Solutions Director, Scientific Beta
Moderated by Brendan Maton, IPE