The main article explores hedging political risk.  There are three main conclusions. First, decisions as to whether to hedge political risk or not should be partially dependent on the broader market environment, on a view on what market prospects would be if political risk were less elevated. Second a generic evaluation of  ‘elevated political risk’ should not dominate all other portfolio considerations. This could lead to portfolios which are de-risked too aggressively, and are inadequately diversified. Third, it is important to be as specific as possible about which economic risks greater political risk may bring about, so as to target hedges more precisely. The article analyses some of the complexities involved in hedging political risk, and the hedges currently in place in Saranac portfolios.

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