Thailand, Philippines and Indonesia: Not Compelling but Relatively Low Beta in 2017 (Part 7 of 7)

Taiwan: Risks Rising but Remains Relatively Attractive (Part 5 of 7)

Korea: Chaebol Under Pressure but Who Will Benefit? (Part 4 of 7)

India: Elections, Incremental Progress and the Decline of Deference (Part 3 of 7)

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>Moving Malaysia to an underweight position aligns us more closely with most actively managed emerging equity funds, which are underweight in the market while around one third of the funds in Copley Fund Research’s coverage universe maintain zero exposure to Malaysia.</p><p>The two main reasons for our downgrade are firstly, the relative high level of exposure to commodity prices and China and secondly, the continued shift towards a more Authoritarian Governance Regime in the wake of the 1MDB scandal…</p>

Moving Malaysia to an underweight position aligns us more closely with most actively managed emerging equity funds, which are underweight in the market while around one third of the funds in Copley Fund Research’s coverage universe maintain zero exposure to Malaysia.The two main reasons for our downgrade are firstly, the relative high level of exposure to commodity prices and China and secondly, the continued shift towards a more Authoritarian Governance Regime in the wake of the 1MDB scandal…

Malaysia: China, Cronyism and the Siege Mentality (Part 6 of 7)