There is almost universal acceptance that emerging economies have taken over as the engine of world growth. The dynamics of their economies, their growing share of world trade and increasing importance in global equity market terms are trends of fundamental and long-term significance. This has seen increasing recognition from institutional investors that emerging markets are an integral part of their equity allocations.
Emerging markets, as an investible asset class, have also undoubtedly been the primary beneficiaries to emerge from the financial crisis, attracting large capital inflows from investors searching for higher growth prospects. However, with the larger emerging markets enjoying the vast majority of fund flows, frontier markets have fallen out of favour. Indeed, as an asset. Class they have lagged both emerging and developed markets in 2009. However, with valuations looking attractive and liquidity, this diverse asset class may offer opportunities for the experienced investor. Read full article here.