Off the wires: Frontier and emerging markets: Inflection points

EPFR’s Quant Analyst Azalea Micottis expands on CFA Institute’s article, Frontier and Emerging Markets: Inflection Points.

The blog referenced in this piece emphasizes the importance of using historical relative performance of equity markets for developing robust allocations to regions and informing tactical asset allocation decisions.


View from EPFR

The EPFR Research Team applied a similar intermarket analysis to time series of cumulative fund flows, normalized by total assets, into Emerging, Developed, and Frontier Markets. Per the individual series below, inflows to Frontier Market Equity Funds have outshone those to both Developed and Emerging Markets Equity Funds over the last twenty years. Especially until the end of 2014, money flowing into this market grew quickly, and despite subsequent periods of redemptions, Frontier Market Equity Funds have continued to lead the way.

Chart representing "Weekly Cumulative Flows rate to Frontier, Developed Market and Emerging Market Equity ETFs and Mutual Funds"

When comparing the spread between cumulative flows to Developed and Emerging Market Equity Funds, one key inflection point is identified in early 2013. Here, the relationship pivoted and allowed developed equity market flows to narrow the gap between those to emerging equities.

Chart representing "Developed Market Equity vs Emerging Market Equity Funds"

Digging further into the dynamics within Emerging Market sectors – another development point highlighted in the CFA Institute’s article – mid-2020 saw a turning point that was followed by over two years of percentage flows to the EM Healthcare/Biotech Sector Funds outpacing overall EM Equity Funds. Recent data, however, shows a sudden reversal in the trend.

Chart representing


Did you find this useful? Get our EPFR Insights delivered to your inbox.

Related Posts

Off the wires: Bitcoin is one year away from a major technical event. History suggests the start of another bull run

Off the wires: Bitcoin is one year away from a major technical event. History suggests the start of another bull run

Bitcoin’s next “halving” is expected to take place in 2024. These events take place when Bitcoin miners have added 210,000 “blocks” to the blockchain leger and are marked by a halving of the Bitcoins that miners get for adding each block. Given the implications for future supplies of Bitcoin, these ‘halvings’ usually push Bitcoin’s price significantly higher, both in the run up to the event and for several months afterwards. This time around seems – so far – to be conforming to the pattern: Bitcoin’s price has risen steadily in recent weeks.

Off the wires: US inflation falls to lowest level since May 2021

Off the wires: US inflation falls to lowest level since May 2021

According to CNN, annual inflation dropped in March 2023 for the ninth consecutive month, and grocery prices fell month-on-month for the first time since September 2020. While the CPI has cooled off – at least temporarily – investors are not treating the news as a green light for the road back to riskier asset classes. With fear far from banished, cash remains king.

When ETF flows confound expectations

When ETF flows confound expectations

From time to time, EPFR’s clients alert us to anomalous flows into exchange traded funds (ETFs) that occur on a specific day and for a specific fund. Given our awareness of these types of flows, and the granularity of our databases, EPFR’s quant team decided it was high time they dove into our ETF database and conducted a systematic analysis of these events.

Better, More Actionable Insights

Let us show you how EPFR can create value for your specific strategy


*Indicates required fields

By ticking this box, you agree to receive marketing communications from EPFR. You can review your email preferences upon submitting this form