Geopolitics – Feature


to their designated bloc of influence. “But I do think we are likely to see geopolitical risk in its various forms being weighted more heavily in investment decision-making processes, which also might lead to asset owners looking for products defined in different and more granular ways.” For example, Graham says: “People might look for products which focus on some countries and not on others, particularly within emerging markets to reduce the amount of geopolitical risk exposure.” But David Vickers, chief investment officer of Brunel Pension Partnership, says it’s better to arrive than to travel. “If it came down to a bloc situation, yes it would be a problem. But the big- ger problem will be the journey to that. It would be bad for the world over.”


What could this mean for investors, particularly pension funds – in terms of asset allocation? The changing situation for SYPA is


propelling thinking already under deliberation. “We are already considering the level of our emerging market exposure as part of our strategy review, although this is driven by a consideration around whether we still buy into the emerging market growth story to the same extent as previously,” Graham says. “If the bloc premise is correct, then you might expect to see some shift away from emerging markets as they will become more difficult to invest in as the geopolitical competition cre- ates more trade barriers,” Graham adds.


Long horizons


Looking at the situation, Tomlinson says LPPI will broadly hold tight. “In the short term, we are unlikely to change much. Our clients have long investment horizons and our senior team have all managed money through multiple market cycles so we tend not to chase the latest ‘hot’ area.”


Issue 117 | October 2022 | portfolio institutional | 23


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52