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Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Cross Asset Strategy

<p>Indian equities have been among the best performing emerging markets in dollar terms over the year to date. The main driver has been the BJP’s overwhelming success in the crucial Uttar Pradesh elections which came through in March, but equities have also benefited from the continued restructuring efforts at some large Indian companies, as well as the more favourable operating environment for key cyclical industries such as steel and the continued rise in risk appetite towards emerging markets.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/025/858/original/Insight%205_Image%202.png?1494487087" class="editor-image img-responsive" data-smartkarma-image-id="25858"></figure><p>…</p>

Indian equities have been among the best performing emerging markets in dollar terms over the year to date. The main driver has been the BJP’s overwhelming success in the crucial Uttar Pradesh elections which came through in March, but equities have also benefited from the continued restructuring efforts at some large Indian companies, as well as the more favourable operating environment for key cyclical industries such as steel and the continued rise in risk appetite towards emerging markets.…

India: Two Steps Forward, One Step Back