Are closed ended funds the best way to play frontier markets?

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Chris Kitchenham, director at Walker Crips Stockbrokers, explains why he prefers closed ended funds for accessing frontier markets

We like to invest a small amount of some clients' portfolios in frontier markets and particularly like BlackRock Frontiers Investment trust (BRFI), the £177m fund managed by Sam Vecht. We have chosen a closed ended fund rather than an open ended alternative because of concerns over the relative illiquidity of these markets. We are concerned that a manager could be presented with distinct difficulties in redeeming huge amounts of stock as ‘hot money' or speculative short-term investors flow in and out of the fund when investment tides change. A closed ended manager can make better l...

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