Man Group studies nearly 40 conflicts since World War II to ask what war usually does to markets and how investors might hedge it. Equities often recover unless conflict triggers an energy shock or collides with a separate credit event, while gold, oil, yields, and the dollar each react differently.
Apocalypse Now?
Man Group
Henry Neville
Research
18 Pages
Key Takeaways
Equities Usually Recover: Stocks were positive in more than 70% of cases six months after conflict began, but first year losses reached 22% in WWII, 38% in 1973, and 16% after 9/11.
Gold Stayed Reliable: Gold was positive 85% of the time in the first five post event days and stayed above a 60% hit rate across nearly every forward window studied.
Yields Tend Higher: In the 12 months after war dates, 10 year Treasury yields were higher 62% of the time and rose by an average 28 bps.
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