What impact may the situation in Syria have on the U.S. markets?
Rusty Vanneman, CFA
“Generally speaking, our decision-making revolves around relative valuations instead of headlines. There may be some short-term downside volatility in the stock market, but that will likely create some opportunities to take advantage of.”
Paula Wieck
“I look at it as noise. More than likely the markets will over-react and be negatively impacted in the short-term, but we’ll be looking at it as a buying opportunity, scooping up assets at a bargain.”
J.J. Schenkelberg, CFA
“Like others, I believe the volatility could create greater trading opportunities, but ultimately, the conflict will have little global economic and market impact.”
Does CLS include any Middle East exposure in portfolios since several of the top performing markets this year are in that region?
Rusty Vanneman, CFA
“Our exposure to the Middle East and Africa is about 1% on average.”
Paula Wieck
“There are several portfolios that hold small positions in Frontier Markets, which are comprised of these regions. The companies that make up these regions tend to do business locally, and are therefore, in theory, less impacted by global markets (less correlated), making them a nice diversification mechanism for the portfolios.”
J.J. Schenkelberg, CFA
“We have taken a small position in Frontier Markets in one of the funds that specifies the ability to take greater concentrated positions. So far, the positions do not warrant consideration in more core allocations. Despite the conflict, income in these areas has been strong from exportation of natural resources. This income generation helps spur further development. Historically, conflict often comes hand in hand with development.”
1790-CLS-09/09/2013