Frontier Market ETFs Poised To Become Riskier

May 16, 2017

Natural Evolution Of Frontier Markets

Frontier market investing is relatively new; the first investable indices were launched 10 years ago by Standard & Poor's, and a year later by MSCI. In that time frame, a number of countries have come in and out of frontier market status.

Regardless of whether MSCI reclassifies Pakistan, Argentina and Nigeria out of frontier markets, new countries will eventually take their place. There may be periods where the frontier market space shrinks or becomes less liquid, but that is to be expected.

As Hertta Alava, fund manager for FIM Asset Management, recently told Bloomberg: “There are over 100 countries in the world that don’t have a proper stock market yet, so there will be new countries, but it will take time.”

Contact Sumit Roy at [email protected].


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