Will the Ukraine crisis have consequences beyond its borders?

POLITICAL RISK

Investors need to sharpen their focus on geopolitical tensions in investment decisions and face the reality of rising risk premia, explains William Davies, head of global equities at Threadneedle Investments

You could be forgiven to think that the Ukraine crisis is de-escalating. However, investors cannot afford to take their eye off the ball. The reversal of globalisation seen recently - particularly in the case of sanctions between Europe and Russia which still have the potential to escalate - is likely to head markets further towards a low-growth world. Pressure is on European stocks, global companies with European and Russian exposure, and those companies which have benefited from the ‘Draghi put' effect. This may sound alarmist, but it is time to take a more defensive equity position...