At a time of heightened global political risk, Eurasia Group and Nikko Asset Management are partnering to bring together Eurasia Group’s proprietary geopolitical risk indicators within Nikko Asset Management’s multi-asset investment management process.
The partnership will offer global investors a risk-controlled means of getting exposure to emerging markets.
This new approach to risk management is detailed in the white paper Political Risk and Emerging Market Investing: An Innovative Multi-Asset Approach. Macro-political risks in emerging markets have increased since the 2008-2009 Global Financial Crisis, reflecting the growing importance of top-down analysis in managing emerging market portfolios.
Given the increasing frequency and intensity of political-economic crises, a more systematic method of measuring political risk and evaluating its impact on market prices is required for emerging markets.
A central thesis of investing in emerging markets assets is that given volatility and dispersion in these markets, there are better opportunities for risk-adjusted returns through a multi-asset approach.