There are around 2 billion people living in frontier markets with an average age of 30.2 compared to 40.5 for the developed world. So a younger and cheaper workforce than most emerging and developed market economies
The BlackRock Frontiers Investment Trust provides investors with access to some of the fastest growing countries in the world. The underlying themes which unite these economies are faster growth, better demographics and low levels of debt compared to both emerging and developed market economies. These are also economies which provide access to untapped commodity resources, lack external investment and have often underperformed in previous years.
The fund has access to around 140 countries covering Africa, The Middle East, Asia, Europe and Latin America and largely these markets are uncorrelated to global markets. This means that for example, if the S&P was negative then Kenya would not necessarily move in the same direction. For highly correlated markets when one moves, the other moves as well.
However, as with have seen with Frontier Market Funds they do come with considerable risk, the New Star Heart of Africa Fund was forced to close and investors lost over 50% of their investments. Diversification across these economies is crucial.
The update with the manager will cover the risks associated with the market and how the fund looks to address these. It will also touch on how stocks are selected and provide some fund highlights.