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An Introduction to Frontier Emerging Markets

Frontier Markets: Does Complexity breed Opportunity?

The Frontier Emerging Markets are less correlated, less researched and have lower levels of liquidity. The complexities of investing in these markets, the lower transparency and market inefficiencies provide a barrier to entry, but equally mean that some exceptional investment opportunities exist. Yet, for many investors, the "frontier" emerging markets remain unexplored. 

In the papers below, the Savvy Content Team has identified papers which provide an introduction to the asset class, discuss the characteristics, and explore means of investing. All papers are free to access for members of Savvy Investor.

frontier markets

Frontier Markets: 2019 Outlook (FIS Group)

For compliance reasons, this paper is only accessible in certain geographies

In this annual outlook on frontier markets, FIS Group looks back at their predictions from 2018, then discusses relevant opportunities present in early 2019. Argentina, Vietnam, and the MENA region are covered in detail.

How US/China tensions could affect markets (Wellington Management, Mar 2019)

The US-China trade-related power struggle and China's quest for 5G dominance both may have implications for China's neighbors such as Vietnam, Taiwan, Japan, and India.

EM local currency bonds: investing in frontier markets (Capital Group, Mar 2019)

For compliance reasons, this paper is only accessible in certain geographies

The idiosyncrasies of frontier markets may offer unique opportunities for informed investors. The authors discuss the specific challenges that exist within frontier local currency markets.

The difference between an Emerging and Frontier Market (Morningstar, 2018)

In this short note, Morningstar explains the difference between Emerging and Frontier markets.

Asia Credit Update (HSBC Global Asset Management, Mar 2019)

For compliance reasons, this paper is only accessible in certain geographies

In 2019, two key developments have supported the Asian credit markets –investors have re-priced the path of US Fed rate policy and Chinese authorities have turned policy focus to boosting economic growth.

Frontier Markets (Meketa, 2018)

The authors of this paper explore frontier markets. They discuss the equity investment opportunities offered by the asset class, the risks associated with an investment, and finally investment implementation.

Why southeast Asia could benefit from US-China spat (Aviva Investors, Mar 2019)

For compliance reasons, this paper is only accessible in certain geographies

Understandably, the ongoing US-China trade was has materially affected certain supply chains and EM sectors. But this conflict may also bring about opportunities for some EM manufacturers to shift production away from China.

GCC/MENA Bond Market Update (Franklin Templeton, Feb 2019)

For compliance reasons, this paper is only accessible in the EMEA region

Franklin Templeton discusses the outlook for GCC/MENA corporate bonds, including recent ratings downgrades, new issues, and other issues affecting the bond market in the GCC/MENA region.

China-US Trade Warcraft: An Investigative Analysis (Mellon Capital, Mar 2019)

We believe that, irrespective of any trade agreement hammered out by the leaders of the US and China in the near term, the trade war has exposed fundamental issues that must be understood by equity investors.

Investing in Emerging and Frontier Markets - An Investor Viewpoint (WFE, 2019)

What are the characteristics that encourage investors to allocate to emerging markets? The authors interview 12 asset owners with combined EM AUM of almost USD 1 trillion.

Indian Private Equity: Coming of Age (McKinsey & Company, 2018)

Private capital deployment has risen tremendously in India in the past 15 years. But the industry is becoming more crowded, and deal appetite is shifting towards buyouts and restructuring opportunities. This 44-page McKinsey report shines light on the present private equity landscape in India.

Asian Credit: High Yield Anticipated to Offer Attractive Opportunities in 2019 (PIMCO)

PIMCO explains that they favor Asian high yield over IG credits, despite historically higher volatility. After 2018's underperformance, valuations are viewed as more attractive, particularly compared with U.S. high yield and emerging market peers.

Trade Tensions Test China’s Provincial Economies (Moody's, Mar 2019)

Moody's looks at the potential ramifications for China’s provinces if the ongoing trade talks between the U.S. and China fall apart and tensions rise once again.

ESG Integration in EMEA: Markets, Practices, and Data (CFA Institute, Mar 2019)

This220-page report from CFA Institute and the PRI contains guidance on ESG integration, case studies of best practices, and details pertaining to ESG issues in eight separate EMEA markets.

Bonded: EM credit and ESG (Hermes IM blog, Mar 2019)

For compliance reasons, this paper is NOT accessible in the United States

Hermes looks at ESG engagement issues in emerging markets credit, discussing sovereign versus corporate credit analysis, as well as case studies of engagement with issuers of corporate debt in Brazil and China.

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