Are frontier markets worth the risks?

WEALTH MANAGERS

Despite compelling drivers such as positive demographics and strong growth prospects, frontier markets are a risky investment. Katie Holliday asks wealth managers if they think the opportunities are worth it.

Investing in the likes of Nigeria, Vietnam or Bangladesh might seem like a risky endeavour, but it is worth bearing in mind ten years ago, the idea of investing in the BRICs would have sent investors running for the hills. The ‘frontier markets’ – which include 26 nations represented by the MSCI Frontier Markets index – are argued to be on the cusp of the growth levels experienced by the BRICs ten to 15 years ago. But investing in these up and coming regions will take some nerve, and in today’s uncertain economic environment most investors are taking a more cautious approach. Polit...