Are frontier markets answer to correlation conundrum?

FRONTIER MARKETS

In an environment where correlation between asset classes is rising, Sam Vecht, manager of the BlackRock Frontiers investment trust, reveals how frontier markets can bring significant diversification to investors' portfolios.

Frontier markets are one of the most exciting investment opportunities globally. Previously underdeveloped nations such as Qatar, Nigeria and Kazakhstan have taken steps to reform their financial systems and have begun to develop infrastructure that will increase urbanisation and lift millions out of poverty in the way that more mainstream emerging markets have done over the last two decades. With $3bn of assets under management (AUM), frontier markets are on the cusp of the trends that have seen emerging markets’ AUM grow to $750bn. In 1991 the combined GDP of MSCI Emerging Markets nati...