Investment Strategies

BNY Mellon On The Next 12 Months In Markets: Don't Forget Politics, Stupid

Tom Burroughes Group Editor 15 January 2014

BNY Mellon On The Next 12 Months In Markets: Don't Forget Politics, Stupid

Wealth managers must watch the political calendar closely this year in setting investment strategy, as the battle for power in democratic – and not-so-democratic – states will be a prominent issue, points out BNY Mellon.

Wealth managers must watch the political calendar closely this year in setting investment strategy, as the battle for power in democratic – and not-so-democratic – states will be a prominent issue, points out BNY Mellon.

Political risks could, nevertheless, create opportunities for canny investors, BNY Mellon Investment Management, part of the US-listed firm, said in a global outlook. There are elections in such economies as Turkey, Brazil, India and South Africa in 2014, for example.

“While our investment boutiques have their distinct views on markets and investing, a common theme from many is that potential opportunities lie amid the political uncertainty likely to characterize 2014,” said Curtis Arledge, chief executive officer of BNY Mellon Investment Management.

“In addition to questions about Fed policy in 2014 and its impact around the world, elections in some key emerging countries could have important market implications,” he said.

“Brazil stands out as the country that has a sizeable civil service and bureaucratic regulatory system, so a change of leadership could affect a number of sectors and the way Brazil does business,” said Sophia Whitbread, investment manager and a member of the emerging markets team at Newton, BNY Mellon’s London-based thematic investment boutique.  “However, the incumbent is leading in the polls and there might not be any changes,” she said.

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