Should investors take a closer look at Asia's frontier?

ON FRONTIER MARKETS

With their low current account deficits and little export exposure to China, maybe investors should take a closer look at frontier markets, says Morgan Stanley's Tim Drinkall.

Many investors are pulling money out of emerging markets, driven by concern about the ripple effect of the economic slowdown in China, and about the Fed’s plan to end the flow of easy money (in the form of quantitative easing) when the time is right.  However, there are not a lot of investors pulling out of frontier markets. In fact, year-to-date inflows are strong. The basic reason is that neither China’s boom nor easy money was ever as important to frontier market equities as it was to emerging market equities. Frontier markets (FM) are still young and small, with estimated total AU...