An Allocation Worth Considering Frontier Emerging Markets (FEM) has a growing share of the world population, encompasses a growing share of the global GDP, yet is under-invested as a proportion of the global stock market. An FEM allocation provides exposure to 34 smaller countries that are not included or are underrepresented in a traditional EM allocation. Asia represents an overly large and growing weight in the MSCI Emerging Markets Index, while FEM provides greater geographic diversification. Geographic Makeup of MSCI Indexes Source: FactSet, MSCI.As of December 31, 2021. Active managers are not constrained by the Index and can invest in many smaller emerging markets. MSCI Frontier Emerging Markets Index Country Allocation (%). As of December 31, 2021 Source: Source: FactSet, IMF The Next Frontier of Diversification FEM companies are generally more independent and less reliant on exports, so they are less correlated with each other and global equities. Similar to International Small Caps, FEM companies are generally covered by fewer analysts, 5.2 on average—vs. 12.6 for both developed and emerging markets—which may offer greater opportunities for established active managers. Correlation Matrix (January 1, 2009 – December 31, 2021) Source: Factset FEM Companies Have Been Less Volatile Than Developed and Emerging Markets Annualized Standard Deviation January 1, 2009 to December 31, 20211 Source: MSCI and Standard & Poors. Past performance is not a guarantee of future results. Investments in frontier emerging markets involve unique risks, such as exposure to economies less diverse and mature than the US or other more established foreign markets. Economic and political instability may cause larger price changes in frontier emerging markets securities than other foreign securities. 1 January 1, 2009 is earliest date all the indices were available. All investments are subject to risk including possible loss of principal. Diversification does not guarantee a profit or protect against a loss in declining markets. Investments in international securities are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. Investments in small capitalization companies are subject to risks such as erratic earnings patterns, competitive conditions, limited earnings history and a reliance on one or a limited number of products. Investments in frontier emerging markets and emerging markets are subject to risks such as erratic earnings patterns, economic and political instability, changing exchange controls, limitations on repatriation of foreign capital, and changes in local governmental attitudes toward private investment, possibly leading to nationalization or confiscation of investor assets. Market prices of investments held by the Fund may fall rapidly or unpredictably due to a variety of economic or political factors, market conditions, disasters or public health issues, or in response to events that affect particular industries or companies. Alpha, often considered the active return on an investment, measures the performance of an investment against a market index used as a benchmark, since the benchmark is often considered to represent the market’s movement as a whole. The excess return of a fund relative to the return of a benchmark index is the fund’s alpha. The Sharpe ratio is calculated using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe ratio, the better the portfolio’s historical risk-adjusted performance. Standard deviation is used as a measure of an investment’s volatility. It calculates the variability of returns by comparing a mutual fund’s return in each period with the average return across all periods. The standard deviation is not available for periods of less than three years. The Russell 2000® Index measures the performance of approximately 2,000 small-cap companies in the Russell 3000® Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. The S&P 500® Index is a capitalization-weighted index of 500 stocks. The S&P 500® Index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500® Index is proprietary data of Standard & Poor’s, a division of McGraw-Hill Companies, Inc. All rights reserved. The MSCI USA Index is designed to measure the performance of the large and mid cap segments of the US market. The MSCI All Country World All Cap Index (MSCI ACWI All Cap) captures large, mid, small, and micro cap representation across certain Developed Markets (DM) countries and large, mid, and small cap representation across certain Emerging Markets (EM) countries. The index is comprehensive, covering a significant percentage of the global equity investment opportunity set. The MSCI All Country World Index ex USA (MSCI ACWI ex USA) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI ex USA Small Cap Index is a free float-adjusted market capitalization weighted index that is designed to measure the small capitalization equity market performance of certain developed (excluding the U.S.) and emerging markets. The MSCI ACWI ex USA Quality Index captures the performance of quality growth stocks across certain developed and emerging market countries by identifying stocks with high quality scores. The MSCI ACWI ex USA Growth Index captures large and mid cap securities exhibiting overall growth style characteristics across certain developed and emerging market countries. The MSCI ACWI ex USA Value Index captures large and mid cap securities exhibiting overall value style characteristics across certain developed and emerging market countries. The MSCI Emerging Markets Index (MSCI EM) is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Frontier Markets Index (MSCI FM) captures large and mid cap representation across certain frontier market countries. The MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S.& Canada. All MSCI data is provided “as is.” The products described herein are not sponsored or endorsed and have not been reviewed or passed on by MSCI. In no event will MSCI, its affiliates, or any MSCI data provider have any liability of any kind in connection with the MSCI data or the products described herein. Copying or redistributing the MSCI data is strictly prohibited. Please visit msci.com for the most current list of countries represented by the MSCI indices. Indices are unmanaged, are not available for investment and do not incur expenses. All data referenced are from sources deemed to be reliable but cannot be guaranteed as to accuracy or completeness. AMG Distributors, Inc., a member of FINRA/SIPC. 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