An asset management firm focusing exclusively on emerging and frontier market fixed income and currency markets came to us for political risk data and country-level analysis in order to execute a bold, trend-based active management strategy.
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Challenge
The client’s exposure to high-risk emerging and frontier markets and use of a loosely benchmarked active management strategy translated into an acute need for globally comparable political risk data. The nature of the investment universe also meant local politics weighed as heavily as global macro trends as a driver of risks and returns, creating an additional need for expert, in-depth, qualitative insight.
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Solution
Through our Institutional Investor Service, the firm runs regular portfolio analytics using our time series data across 40+ political risks and 110+ economic and ESG risks. To satisfy the need for qualitative research, the service also includes access to daily investment-relevant analysis, while the research team and portfolio managers regularly receive briefings from analysts on requested topics.
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Outcome
The client has achieved quantitative rigour in its management of political risk by incorporating our data into its in-house country-level econometric models. Our qualitative analysis also feeds into the team’s regular scenario-planning exercises and composite country views used for investment decision-making, while our data has contributed to the clients ability to outperform their benchmarks.
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