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Frontier stocks have trailed bigger emerging markets in recovering from the coronavirus-induced crash as liquidity has dried up and investors beat a hasty retreat.

BMO Global Asset Management shut a $78 million fund and Aberdeen Standard Investments wound up an investment trust, both invested in frontier stocks, in recent months after fellow fund manager Barings took a similar step last year.

Money managers say assets under management in dedicated frontier funds have tumbled to close to $4 billion from around $15 billion in 2014, when from Nigeria to Lebanon, markets once seen as too risky saw an influx of money, with investors betting on fast-growing economies and idiosyncratic investment stories.

“Flows have been negative for the last three years,” Fergus Argyle, assistant manager of frontier at Somerset Capital Management, told Reuters.

Photo courtesy of Branimir Balogović.