How ethical screening can reduce risk

ETHICAL

Paul Robinson, CEO of Alquity Investments, explains how assessing a company's environmental, social and governance standards can help mitigate the risks of investing in frontier markets.

With almost static returns from developed markets, the age old question of where the best returns can be garnered from is still at the forefront of many intermediaries’ minds. We know that many of the best returns over the last few years have come from ‘emerging’ or even ‘frontier’ markets. But, how we ensure that our investors understand that risks involved in these markets might be outweighed by the potential returns, remains a difficult question. Mitigating risks Investing early in markets such as China or Russia, in 1990 or in 1995, can yield spectacular returns. But at that time...