Scientific Beta

Investment News New Zealand: "The changing ‘deglobalisation’ trade dynamic also requires investors to better-understand any ensuing risks or opportunities for their portfolio companies, factor index specialist, Scientific Beta, argues in a new paper. “Shifts in trade policy influence the structure of the economy, creating winners and losers,” the Scientific Beta study says. “Trade policy clearly influences the financial performance of firms."

Investment News New Zealand 03/03/2024

"(...) The changing ‘deglobalisation’ trade dynamic also requires investors to better-understand any ensuing risks or opportunities for their portfolio companies, factor index specialist, Scientific Beta, argues in a new paper. “Shifts in trade policy influence the structure of the economy, creating winners and losers,” the Scientific Beta study says. “Trade policy clearly influences the financial performance of firms. Moreover, shifts in trade policy will have heterogeneous effects across such businesses; some may benefit from a more globalised market via reduced input costs or more export opportunities, while others may benefit from the introduction of protectionist policies via a reduction in foreign competition.” The analysis found a “statistically and economically significant” difference of 1.4 per cent weekly price change in the shares of companies with high and low exposures to trade policy changes (such as tariff increases). Erik Christiansen, Scientific Beta head of investment solutions, said the new company-level trade exposure offers “another risk management” metric for portfolio investors. (...)"