Barron's Streetwise
The Case for Frontier Markets
Sep 27, 2024
Steven Quattry, a fund manager at Morgan Stanley specializing in frontier markets, discusses the untapped potential of regions like Indonesia and the Philippines. He addresses misconceptions about these markets and underscores the importance of informed investment strategies. Quattry also highlights the vibrant relationship between larger retail players and local wet markets, drawing parallels to American farmers' markets. With a focus on telecom and healthcare growth in Africa, he emphasizes active portfolio management and the demographic advantages of emerging economies.
31:17
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Quick takeaways
- Investing in frontier markets can be advantageous due to their high growth potential, particularly with ongoing economic reforms and rising consumer demand.
- A strategic approach involving active management is crucial for capitalizing on unique investment opportunities in complex frontier and emerging markets.
Deep dives
Understanding Frontier Markets
Frontier markets are defined as developing economies with lower market capitalization, liquidity, and often more restrictions compared to emerging markets. These markets may not only become emerging markets in the future but might have held this status in the past. The distinction between developed, emerging, frontier, and standalone markets is based on various economic and political factors, including GDP variability and investment conditions. An example of this classification highlights that there are currently 32 frontier markets globally, offering investors unique opportunities that are often overlooked.
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