Scientific Beta

A series of seminars presenting the investment philosophy and the mechanics behind the construction of the Scientific Beta Inflation-Friendly Equity indices and illustrating the benefits for investors with concrete investment cases.

Following an extended era of low interest rates and high equity returns where inflation remained near historical lows, 2021 and 2022 saw inflation risk re-emerge as an important macroeconomic risk factor for investors. In this unstable macroeconomic environment, central banks have intervened to increase interest rates and aim to tame inflation. No matter the direction of expected inflation moves though, inflation risk has now become a key risk management consideration for investors.

In order to fill a gap in terms of inflation-friendly equity solutions available to investors,Scientific Beta offers a new approach to overcome macroeconomic measurement challenges and construct two families of dedicated equity portfolios that target desired exposures to surprises in inflation expectations in either an upwards or downwards direction.

The first family of portfolios, termed Inflation-Tilted indices, is designed to fit a long-term strategic allocation framework. Based on their diversified nature, they offer a substitute to traditional cap-weighted indices with additional exposure to inflation surprises, either positive (Inflation+) or negative (Inflation-). As an illustration, the Inflation+ index, over 40 years in the US market, outperforms the broad cap-weighted index by 9.6% conditional to when inflation surprises are positive while maintaining an unconditional performance profile similar to the benchmark.

The second family of strategies, termed Inflation Bet indices, is designed as a short-term tactical tool ideal for the satellite part of investors’ allocations. Investors with their own views on future short-term developments of inflation can employ this tool to exploit those views while remaining invested in the equity market. Due to their more concentrated nature, they offer stronger sensitivity to inflation surprises compared to the Tilted indices, either positive (Inflation Bet+) or negative (Inflation Bet-). As an illustration, the US Inflation Bet+ index posted a positive absolute return of 10.3% in 2022 which makes it relatively better than the broad cap-
weighted index by 29.1%.

In this series of presentations, we present the investment philosophy and the mechanics behind the construction of these indices, and we illustrate the benefits for investors with concrete investment cases.

Dates, Cities and Programmes

Tuesday, 14 March, 2023
Breakfast presentation in Zurich (Widder Hotel, Rennweg 7, Zurich, Switzerland)

Wednesday, 15 March, 2023
Lunch presentation in Frankfurt (Hilton Frankfurt, Hochstrasse 4, Frankfurt, Germany)

Thursday, 16 March, 2023
Afternoon presentation in Munich (Vier Jahreszeiten Kempinski, Maximilianstrasse 17, Munich, Germany)

Speaker

Dimitris Korovilas 

Dimitris Korovilas, PhD, is an Investment Specialist in the Business Development Division of Scientific Beta. Prior to joining Scientific Beta in 2019, he held a Vice President position in the Investment Strategies division of investment bank Citigroup. He has worked on a range of topics including equity factor indices, multi-asset risk premia, portfolio construction and volatility-based strategies. He holds a PhD in finance from the ICMA Centre, Henley Business School in the UK and a Master’s degree from the same school. His doctoral research has appeared in international academic journals.

Registration

Should you wish to attend any of these presentations, please contact Séverine Cibelly at severine.cibelly@scientificbeta.com or on +33 493 187 863.

Attendance at these events is complimentary but registration is required.