On the frontier

Investors with a high tolerance for risk are looking towards less developed ‘frontier markets' that are excluded from conventional emerging-market indices.

Since the term ‘emerging market’ came into currency 30 years ago, most of the countries in today’s MSCI Emerging Markets index have come a long way. Three decades ago, China was just beginning to feel the benefit of Deng Xiaoping’s reforms. Brazil was a military dictatorship, and Russia was still Soviet. Today, all three are increasingly represented not just in specialist emerging-market funds, but in mainstream global portfolios. This underscores an important point. Many of these emerging markets have, to a large extent, already emerged. True, they are different from the world’s develop...