Archive · 7 Dec 2025
Investors Bullish on Frontier Markets After Strong Year
Investors are really excited about frontier markets, which are countries that are smaller and less developed than the usual big markets.
These markets have had a great year, with stocks and bonds doing really well.
Investors like them because they think these countries are doing better financially and are safer to invest in.
Some of the countries that are popular right now are in Asia and Africa, like Sri Lanka, Bangladesh, and Ghana.
Even though there are some risks, like not as much trading happening and political uncertainty, investors still think these markets are a good place to put their money.
They believe these markets will keep doing well next year too.
Frontier markets are expected to continue their strong performance into 2024 due to investor optimism about economic recovery and reduced sovereign default risks.
Investors are increasing their exposure to stocks and bonds in countries like Sri Lanka, Bangladesh, Argentina, Ghana, Ecuador, Nigeria, Pakistan, Uzbekistan, Kazakhstan, and Uganda.
The MSCI Frontier Markets stock index has gained over 40% this year, and the FTSE Frontier Emerging Markets Government Bond Index has risen 12%.
Some investors caution that bond gains may be lower next year due to a significant drop in yield premiums, and frontier markets still carry risks like thin liquidity and political uncertainties.
Despite these risks, investors remain optimistic and plan to increase their holdings in local-currency bonds in these economies.
- Who
- Investors and fund managers like Asia Frontier Capital, Aberdeen Group, and Federated Hermes
- What
- Investment in frontier markets, including stocks and bonds, is increasing
- When
- The trend is expected to continue into 2024, following a strong 2023
- Where
- Frontier markets in Asia, Africa, and South America, including Sri Lanka, Bangladesh, Argentina, Ghana, Ecuador, Nigeria, Pakistan, Uzbekistan, Kazakhstan, and Uganda
- Why
- Due to economic recovery, reduced sovereign default risks, and perceived insulation from trade tensions and geopolitical risks
- MSCI Frontier Markets Index
- 40% gain in 2023
- FTSE Frontier Emerging Markets Bond Index
- 12% gain in 2023
- Top Performing Countries (Debt)
- Egypt, Pakistan, Bolivia
- Key Investors
- Asia Frontier Capital, Aberdeen Group, Federated Hermes
- Notable Countries Invested In
- Sri Lanka, Bangladesh, Argentina, Ghana, Ecuador, Nigeria, Pakistan, Uzbekistan, Kazakhstan, Uganda