Zeroflows is announcing the release of the 2017 Markets Commission Benchmarking Study. This study is the first of its kind to focus exclusively on the frontier equities asset class and have all of its participants manage dedicated Frontier Markets strategy funds. The survey offers extensive insights on forty-four countries.
The study came about as a result of a roundtable on frontier market trading, which Zeroflows held in London with leading buy-side dealers. Among topics discussed, execution costs were in focus in part due to the onset of MiFID 2 best execution guidelines.
Survey Conclusions: The Data indicates that specialist frontier funds have on average paid 14% lower commissions in Frontier Africa versus their peers that operate as part of global asset managers. The latter, however, paid on average 23% lower rates in Frontier Asia and Europe.
Commission rates were also found to be highest in Frontier Africa, while those in the Middle East were among the lowest. All but one fund reported fully bundled rates, as unbundling has not yet reached the universe of frontier investing.
In addition to commission rates, Zeroflows analysed fee structures, such as exchange and clearing fees across markets, with Frontier Asia having on average, the lowest fees, while the highest were observed in Frontier Africa.
As a final component within the structure of rates, Zeroflows analysed commission splits between global banks/specialist brokers and local brokers in select countries. The survey has found fairly uniform splits in Frontier Asia, with wide disparities in Africa.
Yan Gloukhovski, Founder of Zeroflows comments, “We built the Zeroflows community around the goal of improving liquidity search in Frontier Markets. Providing clarity on transaction costs in these markets is part of that drive. The survey has already received early rave reviews from investors for some of its eye opening data points.”
Zeroflows is a London based startup offering a liquidity information platform for emerging and frontier market stocks. Used by over 40 asset managers, including the largest managers in the asset class, as well 35 local brokerages, Zeroflows network significantly broadens liquidity reach, while minimizing information leakage and reducing transaction costs.