Frontier market funds not only offer growth, but also a lower correlation to developed markets than traditional emerging markets, said Frank Braddock, Registered Representative at JHS Capital Advisors. Braddock added that geopolitical risk is also overstated when it concerns frontier markets as long as the fund remains diversified. For example, he said Ukrainian stocks are less correlated to Vietnamese stocks than to Latvian or other Eastern European equities, thereby reducing the overall risk in the portfolio. Finally, Braddock advised investors to put between 3% and 5% of their portfolios in frontier funds.
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