Most investors know about emerging markets like Mexico or Brazil. Lesser known are the so-called frontier markets such as Argentina, Pakistan, Botswana, Ukraine and Vietnam.
As far as economic development, frontier markets are at the bottom of the heap, says Win Thin, global head of emerging markets at Brown Brothers Harriman in New York. “Typically they are poorer countries, but they are on the way up.”
As frontier economies grow, they may become emerging markets and then eventually developed markets like the U.K. or France.
For investors, which countries are considered frontiers varies with whom you ask. MSCI has 24 countries in its Frontier index, while S&P Dow Jones Indices has 34. Both have a good amount from Africa.