The risk of global investor flight in and out of frontier- and early emerging markets used to one of the biggest worries for developed market investors considering adding these markets to improve diversification and gain a better expected risk-return combination.
However, as seasoned frontier markets investors like Mattias Martinsson from Tundra Fonder has been saying for the past couple of years: No reason to fear investor flight, they have already left!
Investors, they often move in herds. There have been some good reasons to give up on this sub asset class, but it leaves opportunities for others now. The smart money could move in.
So, what will contrarian equity portfolio managers find now?
- Growing countries with equity markets trading at all-time large discounts.
- Fine companies trading at all-time large discounts to their sector peers in developed markets.
- Many opportunities to find well-managed companies in modern, asset-light sectors and finance, staying clear of heavy industry and former state monopolies.
Read the full article on LinkedIn, and you will find a genuine surprise!