This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Far-flung Frontier Markets Lure More Investors

"They really seem impervious to what's happening on the main stage," says Ablin.

The main attraction for investors is the rapid economic growth. In theory, it should pull many people in those countries out of poverty, and as they begin to spend their higher pay on refrigerators and mobile phones, local businesses should flourish.

"A lot of them have growing populations and expanding workforces, and they don't just rely on exports of food or oil," Lynch says. "Look at Vietnam. They traditionally exported coffee, seafood and rice. Now they're making high-end machinery."

Not so long ago, these same traits lured investors to emerging markets. But after more than a decade of strong economic growth, the upstarts have slowed. Brazil, Russia and India are now closely tied to swings in global markets as well as to each other.

When China's economy slows, for instance, it drags down financial markets in Brazil, which counts China as the top customer for its exported goods.

But if a frontier market like Ghana ran into trouble, Vietnam and Kuwait wouldn't even notice.

As U.S. markets recently turned turbulent over concerns about the Fed, Ablin watched one frontier fund, the iShares MSCI Frontier 100, climb higher day after day. He recently bought a bunch of shares in the fund for his children and his BMO investment team is mulling a shift into frontier funds, too.

Still, a frontier market like Pakistan can leave some investors skittish. Osama bin Laden hid in Pakistan before he was killed in a U.S. raid in 2011. The country is often at loggerheads with neighboring India. And Pakistan has been the target of U.S. drone strikes against suspected Islamic militants near the border with Afghanistan.

Wells Fargo's Lynch and many others in the investment world argue that the good news out of Pakistan is going unnoticed. An election last month brought Nawaz Sharif to leadership as prime minister. Sharif is considered pro-business and has pledged to take on unemployment, inflation and corruption. In early July, his government lined up a $5 billion loan from the International Monetary Fund.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs