Profiting from the new world of emerging and frontier markets

Becoming more diverse

A quarter of a century ago, emerging markets investment was largely confined to half a dozen countries. Asset choices were limited, timely economic and market data was absent, and rumour was king.

Today, the picture is entirely different. Depending on your criteria, there are over 25 emerging markets (EMs), defined as developing nations wholly engaged with the global economy, to invest in. Moreover, there is a new breed, termed frontier markets (FMs), that have started to engage with global capital and have joined the investible universe. Although these 22 countries are lower down the scale in terms of economic size, market liquidity and accessibility, they now offer a new stream of diversified returns. Not only has the number of EM and FM countries increased dramatically in 25...