1813 Club and Premier Members
What you need to know about emerging markets
Investors tend to have a fascination with the world’s so-called emerging markets, not least because higher returns can be achieved. But there is a downside, according
to financial adviser Close Brothers Asset Management, who have an office in Coventry, which is that these returns are accompanied by higher risks. The risks associated with
emerging markets include currency volatility, the risk of governments defaulting on debt payments (sovereign risk), political instability, unpredictable central banks and regulatory regimes, environmental hazards and natural disasters. Emerging markets can also be
‘Diversification is important in any type of investment planning’
impacted by the economic, political and social events that take place in the more developed markets. So should investors tread warily – and should they
be wary of the various myths that have grown up around these markets? According to Close, the first myth is that all
emerging markets are the same, but the reality is that nothing could be further from the truth. Since every emerging market has its own set of economic, political and social circumstances, every
one invariably has its own risks and opportunities. Also, emerging markets are not equally affected by global events. Myth number two is that if you
invest in emerging markets, you are investing in the global commodity cycle. While it is true that many emerging markets are successful exporters of commodities such as oil, metals, food and precious stones, they are also exporters of manufactured products, technological goods, and services. Myth number three is that
emerging markets are not a socially responsible investment. Investors are increasingly
investing in businesses that align
with global sustainability goals set by the UN, which are aimed at ending poverty, protecting the planet and ensuring prosperity for all. Jonathan Neale (pictured) of Closer Brothers, said:
“Diversification is important in any type of investment planning and exposure to the emerging markets can be beneficial for many clients. Dispelling the myths highlighted should give clients the confidence that some investment in emerging markets can provide additional long term benefits.”
Team scoops top SME prize
The corporate finance division of accountancy and business advisory firm Smith Cooper has named ‘SME Advisory Team of the Year 2018’ at the Midlands’ ‘Dealmaker’ awards. The team, which has completed
several notable landmark deals in the last 12 months, beat off six contenders to walk away with the award, just months after after securing the same award in the East Midlands. This is the first time the team
have won both awards in the same year and head of corporate finance John Farnsworth said: “We are delighted that our work and advisory services have been recognised on such a prestigious stage. “The Insider awards champion
outstanding achievements by professional M&A advisors across the region, so to win ‘SME Advisory Team of the Year’ in both the East and West Midlands in the same year is a testament to the strength of our team.” The awards follow Smith Cooper
corporate finance’s most successful year yet, with a record breaking 35 deals completed in 2017, up from the previous year’s 28.
November 2018 CHAMBERLINK 31
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