The first quarter of the year ended with a fund performance YTD of +1.46% compared to +3.37% of the benchmark. Over the first three months of 2021 markets caught up on their pre-pandemic levels, and have started to behave as they have historically done.
With a quarterly beta of 0.16 to Emerging Markets and 0.29 to Developed ones, Frontier Markets seem to have resumed their own path, not only fairly low correlated to their big brothers, but also smoother.
In this historical moment, Frontier Markets represent a great opportunity for those investors searching for value. They trade at historically high ROEs yet also at record low levels of valuation (price-to-earnings) when compared to both Emerging and Developed ones.
We expect Frontier Markets’ benefits to play out for those investors with the foresight to take advantage of the current market dislocation, before they start catching up.