According to Russ, there are four reasons why many investors should consider having a small allocation to frontier markets.
Market Realist – The graph above compares the price performances of the iShares MSCI Frontier Markets 100 (FM) and iShares MSCI ACWI Index Fund (ACWI) since the end of October 2012. Although global equities (QWLD) have done very well since, with returns of 26.7%, frontier markets have outperformed with stellar returns of 38.7%. This amounts to annual returns of 12.6% and 17.8%, respectively.
Please read on to learn the distinct characteristics of frontier markets that make them attractive.