Frontier Equity Markets: A Primer on the Next Generation of Emerging Markets

Abstract

Over the last several years, the continued integration of world economies and capital markets has caused a convergence in the behavior of equities around the world. Global investors looking to further enhance diversification and capture the potential of rapidly developing economies with compelling valuations have begun to look for the next generation of emerging markets. A loosely defined class of countries has emerged under the popular buzzword, “frontier” markets. In this article the authors provide an introduction to these markets, examining how they are defined and the characteristics that differentiate them from the standard emerging markets.