Scientific Beta

The Scientific Beta Defensive Equity index distinguishes itself from traditional defensive equity strategies by strategically avoiding implicit bets. This index steers clear of industry biases, regional imbalances, and exposure to expensive or unprofitable securities. By sidestepping these implicit biases, the index not only protects capital but also delivers smooth risk-adjusted returns over the long term.

Many equity investors opt for defensive strategies to strike a balance between capitalising on market upswings and mitigating the impact of market downturns. Their goal is to create a more stable and resilient investment portfolio. However, pursuing a defensive stance often results in inadvertent exposure to specific sectors and regions, along with overweighting stocks that possess unfavourable characteristics, such as high valuation or low profitability.

The Scientific Beta Defensive Equity index distinguishes itself from traditional defensive equity strategies by strategically avoiding implicit bets. This index steers clear of industry biases, regional imbalances, and exposure to expensive or unprofitable securities. By sidestepping these implicit biases, the index not only protects capital but also delivers smooth risk-adjusted returns over the long term.

Our innovative two-step approach to portfolio construction combines the simplicity of stock selection with the power of robust risk models. This approach enables a comprehensive evaluation of each stock’s contribution to the defensiveness of the portfolio to be made, ensuring a highly effective risk reduction for investors. In essence, the Scientific Beta Defensive Index targets better risk-adjusted returns by effectively reducing risk and avoiding the biases present in standard defensive strategies.