RT Journal Article
SR Electronic
T1 Frontier Markets: <em>Punching Below Their Weight?</em>
               <br/>
               <em>A Risk Parity Perspective on Asset Allocation</em>
JF The Journal of Investing
FD Institutional Investor Journals
SP 140
OP 149
DO 10.3905/joi.2012.21.3.140
VO 21
IS 3
A1 Jorge A. Chan-Lau
YR 2012
UL https://pm-research.com/content/21/3/140.abstract
AB Are frontier markets the next emerging markets? And if so, should global equity investors include them in their portfolios? From a risk parity perspective, investors could benefit from a frontier markets allocation well in excess of the market weight of the asset class. A risk parity portfolio tends to outperform a market cap–weighted portfolio during periods of positive equity returns and deliver comparable returns during crisis periods. Even if portfolio managers could not follow a risk parity asset-allocation strategy due to benchmark tracking considerations, overweighting frontier markets could help them outperform their benchmarks during upside periods without increasing downside risks significantly.TOPICS: Frontier, equity portfolio management, global