TY - JOUR T1 - Frontier Markets: <em>Punching Below Their Weight?</em> <br/> <em>A Risk Parity Perspective on Asset Allocation</em> JF - The Journal of Investing SP - 140 LP - 149 DO - 10.3905/joi.2012.21.3.140 VL - 21 IS - 3 AU - Jorge A. Chan-Lau Y1 - 2012/08/31 UR - https://pm-research.com/content/21/3/140.abstract N2 - 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 ER -