While inflationary pressures have increased across some Emerging Market countries, those equity markets could still be volatile and subject to country risk.  As these markets have matured, do they still provide an attractive opportunity set for the active manager?  Using the Barra Global Equity Model (GEM2) and Barra Single Country models, we examine measures of volatility and dispersion to highlight the scope of the opportunity set and its corresponding risks.  By applying...

The integration of global financial markets has caused concern that future returns and volatility may become increasingly correlated with developed markets. Risk-tolerant investors are exploring fledgling equity markets in far flung corners of the globe, hoping to find better growth prospects and investment returns that are less dependent on global integration. In this paper we review the potential for international diversification that frontier markets could offer relative to its more mature...

The new MSCI Global Equity Model (GEM3) incorporates advances in risk methodology, including the addition of 22 frontier markets to the estimation universe, with full coverage of the MSCI Frontier Markets Index. Frontier markets are a diverse niche for risk-tolerant investors willing to weather market volatility to reap potentially huge gains. The relative obscurity of frontier markets can raise important questions for investors: What are the valuation and risk characteristics of...