Quantitative Insight - Frontier Markets: The Next Investment Frontier?

Mar 26, 2012

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 frontier markets compared to emerging and developed markets? Have frontier markets offered downside protection during the recent crisis? This paper will address these questions and more.