Northern Trust has extended its frontier markets investment capability by launching a Diversified Frontier Markets Index Strategy to provide endowments and foundations with efficient exposure to the next generation of emerging markets.
“Many clients have come to us looking for a dedicated frontier markets solution,” said Chad Rakvin, Director of Global Index Management. “Our new strategy allows these investors to get diversified frontier market exposure quickly, efficiently and at a good value relative to active managers. Clients have found that we have demonstrated experience navigating the operational, regulatory, and liquidity challenges in these markets.”
The Diversified Frontier Markets Index Strategy, benchmarked to the S&P Extended Frontier 150 Index, has attracted more than $100 million in assets from non-profit institutions.
“As emerging markets have grown up and become more in synch with the rest of the world, investors are looking for new growth opportunities that move more independently of global stocks,” said Greg Behar, Senior Investment Strategist for Global Index Management at Northern Trust. “Frontier markets are relatively inexpensive given long-term economic growth potential and less correlated to the rest of world, motivating investors to look at the asset class.”
“The natural evolution for traditional emerging market portfolios will be into the frontier markets, driving demand for the larger, more liquid index positions. Diversified frontier market index strategies should benefit from this evolution,” Behar said.
Northern Trust is a leader in global index management with approximately $250 billion invested in equity index strategies. Northern Trust’s product array includes a comprehensive set of equity strategies that are available through collective trust funds and other commingled funds, as well as segregated accounts. Each fund is designed to offer institutional investors and high net worth clients efficient market exposure to designated benchmarks.
Emerging and Frontier Markets Risk: Emerging and frontier markets investing may be subject to additional economic, political, liquidity, and currency risks not associated with more developed countries. Additionally, frontier countries generally have smaller economies or less developed capital markets than traditional emerging markets and, as a result, the risks of investing in emerging market countries are magnified in frontier countries.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$749.7 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.