The solution provides endowments and foundations with exposure to the next generation of emerging markets. The Diversified Frontier Markets Index Strategy, benchmarked to the S&P Extended Frontier 150 Index, has attracted more than $100 million in assets from nonprofit institutions.
The strategy allows investors to get diversified frontier market exposure quickly, efficiently and at a good value relative to active managers, said Chad Rakvin, director of Global Index Management. “Clients have found that we have demonstrated experience navigating the operational, regulatory and liquidity challenges in these markets,” Rakvin said.
“As emerging markets have grown up and become more in sync with the rest of the world, investors are looking for new growth opportunities that move more independently of global stocks,” said Greg Behar, senior investment strategist for Global Index Management at Northern Trust. “Frontier markets are relatively inexpensive given long-term economic growth potential and less correlated to the rest of world, motivating investors to look at the asset class.”