Low correlations between the worlds most esoteric stock markets are enabling many investors in frontier market indices to escape, or at least absorb, the turmoil in the Middle East relatively unscathed.
International debt securities in these countries are proving more prone to contagion, but equity investors are reaping some of the diversification benefits that frontiers promise.
As protests have spread across the Middle East and North Africa, causing the downfall of presidents in Tunisia and Egypt, investors have withdrawn money from the emerging markets universe at large. But they have continued to put more money to work in frontier equity funds in particular.
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