Sound prospects for investors in 'frontier markets'

Once solely the preserve of adventurous investors, so-called frontier markets are now an enticing destination for the rest of us, says David C Stevenson. Here, he explains why, and how you can profit.

A cynic could be forgiven for thinking that when everything in the land of risky stuff (equities) is rising, then the last refuge of the adventurous optimist has to be frontier markets. Back in 2007 and early 2008, I remember writing about opportunities in Africa, thinking that maybe, just maybe, this was a bit too adventurous for a market wobbling on the edge of irrational exuberance.

So it proved. As equity markets plunged, frontier markets vanished off the radar. They were hammered in 2009 and didn't recover until fairly late in the day, in 2011. But the turnaround has been extraordinary. Over the last 12 months, the MSCI Frontier Markets index has shot up by 20%, compared to just 12% for the Emerging Markets index. Is this the last hurrah of global stock markets?

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Qatar ITQIF$0.92-13.2%
Aberd. New ThaiANW588p-1.3%
OrigoOPP13.1p-62.5%
Africa Opportun.AOF0.85p-16.0%
Advance FrontierAFMF51p-11.4%
BlackRock FrontierBRFI105p+0.7%
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