Frontier markets: Too big to ignore

Julie Dickson, equities portfolio manager at Ashmore, says despite a huge growth in the asset class, frontier markets remain an under-allocated asset class.

The frontier universe as we know it, currently includes about 80 markets, versus only 25 in the MSCI Frontier Markets index.  Frontier markets tend to be relatively small and shallow. Liquidity also tends to be low. The total size of the assets under management remains small, approximately $18bn. This compares to $8.6trn in developed markets, and $1trn in emerging markets equities. Still, the asset class is growing rapidly. Frontier markets remain an under-allocated asset class, but it should continue to grow rapidly due to the long term, uncorrelated growth story currently unfolding ...