Schroders launches Frontier Markets Equity fund

Schroders has added a frontier markets Sicav to its offshore fund range.

The Luxembourg-domiciled Schroder ISF Frontier Markets Equity fund is managed by Allan Conway, the head of emerging market equities, and Rami Sidani, the head of MENA, who also run the Schroder ISF Middle East fund.

The fund is benchmarked against the MSCI Frontier Markets index, of which the Middle East makes up about 60%.

Conway and Sidani will use a similar investment process to that applied to the group's existing global emerging markets fund range.

The managers say frontier markets have combined nominal GDP of $2.4trn, or 3.9% of global GDP, second only to China, which, combined with low labour costs and abundant natural resources, make them a compelling proposition.

These markets are underowned, have a low correlation to global markets, and are trading on attractive valuations, the managers add.

"Investors are increasingly seeking to establish a strategic allocation to emerging markets rather than using them tactically due to an increase in risk appetite, which we believe should lead to greater focus on the frontier markets," Conway says.

"The launch of the Frontier Markets fund strengthens our global emerging markets proposition and offers investors access to some of the fastest growing economies in the world as well as significant diversification benefits."