Are Frontier Markets a Viable Alternative to Underperforming Emerging Markets? (PA)
With emerging markets in the doldrums, an article in Professional Adviser (PA Portfolio: Are frontier markets a viable alternative to underperforming EMs?) asked three experts whether frontier markets offer a better place for adventurous investors to invest in. The experts included:
- Caroline Shaw, fund manager, Courtiers, who commented:
“Since the start of 2013, frontier market equities have outpaced emerging market equities with total returns of 42.5% versus -2.6%. This wasn’t the case for the two previous years, where emerging market equities returned -3.1% over the period versus -11.6% for frontier market equities.”
They are using the Schroder Frontier Markets fund and have been “delighted” with the 30% return since acquiring it six months ago.
- David Hambidge, director of multi-asset, Premier Asset Management, who commented:
“We do not see this asset class replacing emerging markets but it does provide a good complement to both emerging and developed markets, as the correlation of returns has been very low and will probably remain that way for some time to come.”
- Kailesh Patel, director, Alka Financial Services, who commented:
“Frontier markets are taking advantage of the leap frogging of technology to spur economic growth and are basically avoiding all the traditional pitfalls to achieve this.”
He then gave the telecom revolution in sub Saharan Africa as an example.
To read the whole article, PA Portfolio: Are frontier markets a viable alternative to underperforming EMs?, go to the website of Professional Adviser.
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- South Africa Stocks “Expensive Within Emerging Markets” (Moneyweb.co.za)
- Emerging Markets in the East Converging With Developed Markets in the West (Create Research)
- Investors Exit Africa for Other Frontier Markets (WSJ)
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- Frontier Markets: 2019 Outlook (FIS Group)