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.

Looking at Asia, Whitbread added, “Political unrest to varying degrees has always been a feature of Asian markets and one factor investors should consider,” she said.

Politics – and civil unrest – has certainly been a factor to consider in countries such as Thailand, for example, where there have been anti-government protests against the administration of Thaksin Shinawatra and his proxies, such as his sister, Yingluck. There are worries that Thailand’s reputation as one of the region’s older democracies is at risk – also posing a threat to its economy and sectors such as international tourism.

As far as politics in general is concerned, Colm McDonagh, fixed income manager at Insight Investment, the London-based BNY Mellon boutique, pointed out a particular pattern with elections: “Typically, before elections people spend more money, which can lead to inflation and other negative side effects.”

Looking at Brazil, McDonagh said: “Its middle class had been rising, but now has become squeezed.  Not enough has been done to improve infrastructure such as public transportation, which can be a catalyst for protests.”