NEW YORK (MainStreet) — While most investors assume that Africa, Southeast Asia, Central America and the Middle East are on the riskier side of the investment spectrum, T. Rowe Price found juicy returns in frontier markets and is looking for more next year.

“It’s been the highest returning and least volatile asset class over the last five years,” said Oliver Bell, manager of the T. Rowe Price Africa & Middle East Fund and the Institutional Frontier Markets Equity Fund. “Suggesting this asset class is not as risky as perceived.”

Bell was among several T. Rowe Price fund managers and investment professionals sharing their 2015 global market outlook at a press briefing that took place in Manhattan last week.

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“Emerging markets still offer pockets of opportunity and relatively attractive valuations, especially in sovereign and corporate investment-grade debt and in certain areas of the high yield market,” said Arif Husain, head of international fixed income with T. Rowe Price.

However, frontier markets as a whole, such as Vietnam, Mozambique, Costa Rica, Nigeria, Argentina, Sri Lanka and Pakistan, have outperformed emerging markets and secured more fund flows since 2012, according to data from MSCI and Lipper.

“What’s driving investor interest is that the number of frontier market countries that have some form of conflict has fallen to only five,” said Bell. “That simple reason is why we can see stability and economic growth in these countries. The democracy that the peace dividend has brought about is resulting in accountability and better macro economic management.”

Despite the recent Ebola scare, investor money is still gravitating to Africa, for example, Mozambique alone has attracted $7 billion in foreign direct investment while Vietnam has attracted $10 billion, according to World Bank and Haver Analytics.

“Ebola is closer to Brazil and London than many parts of Africa,” Bell told journalists recently at the Convene Convention Center on 7th Avenue in Manhattan. “All this investment and stability is providing a strong platform for growth.”

Companies of interest include Price Smart, a U.S. listed stock that gives full exposure to Costa Rica through a Costco-like company that was set up in the Central American country.

“Just as emerging markets in the last 15 years have become an increasingly bigger part of corporate earnings of U.S. listed companies so will frontier markets, which currently are only a small part of these companies,” Bell told MainStreet after the panel discussion ended.

Types of frontier market stocks that are out performing are financial and consumer companies. “Consumer and manufacturing companies will become a bigger part of frontier market stocks in the near future,” said Bell. “If you’re excited by the asset class, 5% is reasonable to invest. Some are putting 10% in their global portfolio. It depends on your outlook, time horizon and risk tolerance.”

Overall, stock prices in the U.S. have soared but lagged in Europe, Japan and some emerging markets.

“U.S. stocks will continue to advance though likely at a more moderate pace and the potential exists for positive earnings surprises in Europe and Japan in 2015,” said Bill Stromberg, head of equity with T.Rowe Price who was also in attendance at the panel discussion. “We expect more volatility in 2015 and investors will need to be selective. Fundamental equity research and individual stock selection will be more important than ever.”

—Written for MainStreet by Juliette Fairley