Ortec Finance, a leading global provider of risk and return management solutions, has published a new whitepaper addressing the mounting challenges facing institutional investors amid escalating global trade tensions.
Titled ‘Stress Testing Your Balance Sheet in the Trade War Era’, the report offers a detailed analysis of how investors can better prepare their portfolios for unpredictable geopolitical shocks.
As global markets continue to reel from heightened geopolitical instability, conventional risk management strategies are proving insufficient. The whitepaper follows Ortec Finance’s earlier paper, Trade wars: A geopolitical stalemate? What’s next for Institutional Investors?, and delves deeper into how stochastic and deterministic stress testing approaches can work together to strengthen portfolio resilience.
The latest study introduces a tailored Trade War Stress Scenario that reflects the growing fragmentation of international relations and a global turn towards economic nationalism. The scenario models varying degrees of economic contraction across major regions, including mild contraction in Canada, stagnation in the U.S., and low growth across Europe.
Ortec Finance applies this stress scenario to three hypothetical institutional investors: a U.S. endowment fund, an Asian life insurer, and a European pension fund. The analysis highlights significant impacts on key financial outcomes for each, underscoring the importance of managing currency exposure and interest rate risk in times of heightened volatility.
The whitepaper explains how combining stochastic and deterministic approaches offers a more comprehensive framework for navigating these uncertain times. Stochastic modelling helps investors understand risk-return trade-offs across multiple scenarios, while deterministic stress tests enable them to explore extreme but plausible narratives that could significantly disrupt investment strategies.
By showcasing the results of these tests on various types of institutional portfolios, Ortec Finance aims to provide a foundation for informed discussions on future policy decisions, investment reviews and strategic planning. The paper serves as a timely resource for investors seeking to safeguard their portfolios amid the continuing unpredictability of global trade politics.
Read the whitepaper here.
Keep up with all the latest FinTech news here
Copyright © 2025 FinTech Global
The post Ortec Finance explores trade war stress test methods appeared first on FinTech Global.