What are frontier markets and why invest in them?
A frontier market is a country that is more established than the least developed countries (LDCs) but still less established than the emerging markets. While they are smaller, less accessible, and somewhat riskier than more established markets, frontier markets are still investable.
What is MSCI Frontier Market Index?
The MSCI Frontier Markets Index captures large and mid cap representation across 27 Frontier Markets (FM) countries*. The index includes 85 constituents, covering about 85% of the free float-adjusted market capitalization in each country.
Is it worth investing in frontier markets?
Frontier markets present an interesting long-term investment opportunity, as they offer above average growth potential through economic cycles, together with potentially lower than average volatility. These markets are typically less researched and less liquid than most equity markets, and so tend to be less efficient.
Is Serbia an emerging market?
Croatia, Serbia and Ukraine were emerging markets with biggest upgrades from Fitch over last five years. Fitch revised up its real GDP growth projection for Serbia in 2021 to 6.3% (from 5.2%), while in 2022 it anticipates continued strong growth of 4.4%.
Are there mutual funds that invest in frontier markets?
The first and only open-end mutual fund in the U.S. to invest primarily in debt instruments of frontier market issuers. Invests primarily in sovereign and corporate debt within frontier markets, as well as frontier market currencies. Over time, the Fund seeks to invest in 45 to 65 countries, local and hard currency denominated debt.
How to get exposure to the frontier market?
There are numerous ways to gain exposure to Frontier Markets. Along with exchange traded funds and investment trusts, another method is to invest in funds that focus on these markets. The funds listed on this page are split into four categories:
Are there ETFs that track the frontier market?
Launched in June 2008, the Invesco Frontier Markets ETF tracks the investment performance of the BNY Mellon New Frontier Index. This index is made up primarily of frontier-market stocks that have depositary receipt listings on stock exchanges in the United States or on the London Stock Exchange.
How are frontier markets different from emerging markets?
They exist in contrast to emerging market economies, which are further along in implementing economic reform programs that can lead to higher rates of growth. While frontier markets present significant risk, the potential rewards are faster rates of economic growth in dynamic economies that are characterized by vibrant, youthful populations.