Talking Point  

Risky assets investing amid political tensions can be 'good strategy'

To ensure optimal allocation to ensure funds are not over reliant on a single political outcome, within its multi-asset framework, Schroders uses scenario analysis to deal with different political outcomes. 

Mr Lauro adds: “We build a baseline scenario which incorporates what we think is most likely to happen then we have alternative scenarios. 

“For each of them we try to work out their implication for financial markets. We then apply a probability to each of the scenarios and we build the portfolio accordingly. Within the equity division instead, the strong bottom up approach ensures the  portfolio is never too exposed to geopolitical risk.”