PT - JOURNAL ARTICLE AU - Jorge A. Chan-Lau TI - Frontier Markets: <em>Punching Below Their Weight?</em> <br/> <em>A Risk Parity Perspective on Asset Allocation</em> AID - 10.3905/joi.2012.21.3.140 DP - 2012 Aug 31 TA - The Journal of Investing PG - 140--149 VI - 21 IP - 3 4099 - https://pm-research.com/content/21/3/140.short 4100 - https://pm-research.com/content/21/3/140.full 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