Volatile political events can offer great investment opportunities
Buy into firms with attractive valuations and sound corporate governance to avoid high risk, writes Siboniso Nxumalo
The life of an emerging market fund manager is a world filled with political noise. Most of the concerns and questions we receive have something to do with some "political" event that has just occurred. Over the past few years, Brazil’s president has been impeached, South Korea’s prime minister is undergoing her own impeachment trial, the Turkish prime minister is seeking authoritarian powers after the failed coup attempt, SA’s government has been at war with itself and then there is Russia. All this political noise creates great investment opportunities for emerging market investors like us. We thrive in environments where markets discount great businesses to highly attractive prices due to perceived uncertainty and risk. Especially when this uncertainty has nothing to do with the underlying fundamentals of the companies in which we invest. In 2016, we were introduced to the concept of political risk in the developed world. First with Brexit, then with the man who is dominating wat...
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