Frontier markets emerge from EM sell-off unscathed

Frontier markets delivered a positive return in January, as local ‘sticky money' stayed put in the face of heavy outflows from EMs.

The emerging markets sector saw outflows of $6.3bn during the week to 29 January, the largest amount on record in dollar terms, as investors fled the plummeting sector. In contrast to their reputation for volatility, frontier markets have remained fairly stable recently amid the broader EM sell-off. Large international investors and ETFs are often the first ones to exit at the sign of trouble, but they tend to overlook the less liquid and accessible frontier markets. Frontiers are also generally less affected by global macro issues and driven more by domestic factors. According to ...