Next Generation Defensives: Low-Beta-Beneficiaries Of A Changing World Until 2050
We pay particular attention to the following:
- world population growth,
- demographic changes, and
- decreasing global income inequality.
We have identified the defensive non-durable consumer goods (beta of 0.67), utilities (beta of 0.72), and healthcare (beta of 0.73), as the ones with the lowest betas to the broad market over a timeframe that includes the global financial crisis.
The historical analysis shows that the Next Generation Defensives strategy can add value to investors.
Key findings are:
- The index would have generated a 9.72% annualized return over the analyzed period between May 08, 2006 and January 14, 2020, whereas the Solactive GBS Developed Markets Large & Mid Cap Index achieved 6.55%.
- The low beta of the Next Generation Defensives Index (at 0.73) relative to the benchmark is appealing in times of rising uncertainty.
- In all five stock market corrections we have examined, the index performed better than the benchmark.
Read the full white paper, including a detailed historical analysis of the underlying markets and sectors here: