The fallout from sinking interest rates has spilled over into international markets. We're seeing frontier and emerging markets outperform on the back of lower borrowing costs.
While everyone has a theory behind the global decline in interest rates, I noted last week that falling yields were one of the main reasons emerging markets—but particularly frontier markets—have outperformed this year.
Smaller, frontier market Exchange Traded Funds (ETFs) are outperforming by a wide margin: Egypt is up 23.0 percent while Turkey has gained 20.2 percent, The Philippines is up 14 percent, Vietnam is up 7.9 percent. There are currency effects with these ETFs, but you get the point.