While there aren’t many frontier market indexes against which they can benchmark their investments, emerging-market funds are increasingly placing their bets on frontier markets, Dow Jones reports.
In fact, in January, HSBC Holdings will introduce a frontier market fund that will scan 60 countries for opportunities, including those that are included in more developed, emerging markets indexes, and other banks are expected to launch frontier markets funds of their own next year.
This Friday, MSCI Barra will launch a frontier market index of 19 countries, including Bahrain, Bulgaria, Croatia, Kazakhstan, Kenya, Nigeria, Sri Lanka, the United Arab Emirates and Vietnam.
“Our decision to launch the MSCI Frontier Markets Indices reflects the growing interest from international investors in these equity markets, as they look beyond existing developed and emerging markets in their search for new investment opportunities,” said MSCI Chairman and Chief Executive Henry Fernandez.
Standard & Poor’s also offers frontier indexes, about which S&P Index Services Vice President Alka Banerjee says she gets calls every day. However, getting reliable data on the stocks in the index is an issue, she admitted. S&P is certain that the data is reliable for the 30 companies in the S&P Select Frontier Index that it launched in October, she said, but not particularly so for all of the 270 companies in the S&P/IFC Global Frontier Markets Index.
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