Bestinvest says
Frontier markets are experiencing rapid GDP growth, have a low debt burden and typically have a low correlation to both Developed and other Emerging Markets. The Frontier Markets Index has a heavy weighting in Africa/Middle East relative to the MSCI Emerging Markets Index, and has little exposure to Asia. Templeton are very experienced Emerging Markets fund managers and are building a well resourced team to cover what is arguably the next generation of Emerging Markets. Although this investment should be considered as high risk it offers exposure to some of the fastest growing regions in the world.
The Fund aims to achieve long-term capital appreciation by investing principally in transferable equity securities of companies incorporated and/or having their principal business activities in the frontier markets countries across the market capitalisation spectrum. Frontier market countries include Argentina, Bahrain, Kazakhstan, Kuwait, Nigeria, Pakistan and Vietnam. The MSCI Frontier Market Index consists of 26 countries. The managers believe that frontier markets have the same development potential as emerging markets 15-20 years ago.
The bottom up investment process for this fund is very similar to that of the flagship Templeton Emerging Markets fund and includes identifying stocks that are potential bargains on a five year view, performing in-depth fundamental analysis, conducting a review of competing stocks in the sector and portfolio construction.