Risks of Investing in Frontier Markets

" There's been a lot of talk about investing in emerging markets such as India and China above what about as a -- Donald hasn't done. From joining us this morning is commenting Capello -- CIO and founder of sturgeon investments Clemente good morning -- thank you for coming in the morning fashion. -- been teasing this company your company specializes in emerging markets but in one specific region of the world where is that. What is Central Asia which is Scott actually quite a strategic location because its right in the middle between nine Europe India and China. It's -- supplying all additional. Natural resources. In order to fuel the growth of these regions so we'll -- kind of opportunities that would kind of return on the investment you can you expect. Well -- it's obviously a frontier markets so it's highly risky environment. But in the current environment everything it's pretty risky so it's really a good match against inflation for instance because you re investing in real assets such as gold. Oil and agricultural commodities so it's the ultimate inflation that if you believe. Money printing will continue. So. Did you look at India China Brazil movies more classic emerging market -- Well these are very well covered by other people what are probably smarter than me. And I'm looking me on the frontier markets where -- can have an edge. Where markets are an efficient than a sophisticated investor. Investing across asset classes can. They can goods. Make good for church. So were obviously my first thought is what about political stability how do you gates and what all the risks. They're huge risk on the political side and that just goes into the portfolio construction and the analysis and it's all about the search for information. We have one office and observation on. And we go to the region extensively and part of the research we do is very political to see how government. Going on. And how stable RD and what is that the that the policy going towards which model. So far Azerbaijan Kazakhstan -- more stable than. Most of the western countries what sectors we to a to a gold or sort of natural resources. While the underlying economies mostly natural resources but what we want this week to. Make money on the natural resources perhaps investing through other sectors such as banking or more consumer. Because this money goes into this region. Did next to natural resources is actually flowing down other sectors. Which -- moreover -- such as consumer banks which have done very well. Got ten seconds Clemente he had to pick one market that provides the best opportunity what would you pick. Because they're based on definitely. That's not our numbers staple. Political environment. And -- beautiful city beautiful city and I commit to oppose such investments thank you so much for being here -- appreciate it all right."