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
Speakers:
Felix Goltz, PhD, Research Director, Scientific Beta
Eric Shirbini, PhD, Global Research and Investment Solutions Director, Scientific Beta
Moderated by Brendan Maton, IPE