Scientific Beta

Investment News New Zealand: "Custom index specialist, Scientific Beta, has mooted two potential benchmark-tweaking strategies for diversified investors in times of sky-high equity market concentration."

Investment News New Zealand 16/03/2025

"(...) In a recent paper, the institutional index-maker suggests investors could either allocate a certain portion of factor-based portfolios to “mega-cap” companies or reweight stock holdings “to closely align with the market cap benchmark”.

Authored by Scientific Beta index director, Daniel Aguet, and head of investment solutions Australasia, Warwick Schneller, the study says either method would increase exposure to mega-caps while maintaining some factor diversification but with different risk attributes and trade-offs. (...)"