Dutch asset manager Optimix is set to increase its exposure to frontier markets, at the expense of European stocks, Michel Alofs and Jaap Westerling , both director and partner and Ivan Moen, partner and head of Investments confirmed to investors.
The Amsterdam-based group sold all its investments in the Morgan Stanley Frontier Markets Fund in September 2014, the fund since fell by nearly 20%.
However, given the prospect of the US Federal Reserve holding back in further rate cuts, and the gradual stabilisation of the oil price, combined with favourable demographics in frontier markets, the group now decided to buy the fund again.
The group cites a price earnings ratio of 10, compared to 12 in emerging markets and 16.5 in global equities as an incentive, in addition, the group expects dividend returns of 4%.
In order to maintain the overall risk profile of its portfolio, the group will reduce its European equity investments.