In the pre-credit crunch boom, with the search for outperformance pushing investors to more and more exotic asset classes, frontier markets seemed like a good idea. But in the past four months, they have joined the global plunge. Are investors regretting their daring?

For the first six months of this year, investors in emerging markets, especially frontier markets, could feel pleased with their decision as the story of decoupling, the idea that the developing world was no longer completely tied in economic terms to the trajectory of the developed world, seemed to grow in plausibility. Then in July it all started to come unravelled, as western investors repatriated their money and global liquidity dried up.