Rising US Interest Rates May Drop Ex GCC Frontier Markets like a Hot Wok

Rising US interest rates strengthen the US dollar, decrease risk appetite for FM & EM equities, and cause large capital flows from foreign investments back to the US Fixed Income and low volatility Equity Markets. Frontier Markets (FM) and Emerging Markets (EM) could easily experience an additional 10 to 15 percent pullback in equities over the next three to six months, if the US 10 yr Treasury stays at or above 3 percent. Gulf Cooperation Council (GCC) equities could be the exception because of their low correlation with non-oil rich states. It may be prudent to trim some Ex GCC FM & EM equity positions. Bloomberg's article & videos may shed some light.