Geopolitical and macroeconomic trends are increasingly influencing business and profits. Analysis shows that most UK equity returns occur during brief periods related to major global or economic events. Specifically, nearly 60% of the FTSE 100's returns come from approximately 59 days each year. Between 2017 and 2024, major listed businesses experienced a loss of $320bn in profit due to geopolitical and macro uncertainty. Businesses in geopolitically exposed sectors have adapted successfully, protecting their margins, diversifying portfolios, managing costs, and updating governance for sustainability amidst these changes.
On average, nearly 60% of the FTSE 100's returns were generated on just 59 days each year - about 16% of the year - which coincided with major global or economic events.
Between 2017 and 2024, the 3,500 largest listed businesses globally lost $320bn in profit during periods associated with geopolitical and macro uncertainty.
This new environment is creating winners and losers. A cohort of businesses in our study in geopolitically exposed sectors and regions managed to either protect or achieve top margins during periods of significant macro uncertainty.
It is essential for CEOs and boards to learn from these companies to ensure long-term sustainability.
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