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Frontier markets no riskier than emerging markets

Friday, July 01, 2011
Opalesque Industry Update - The latest publication from the Research Foundation of CFA Institute, Frontier Market Equity Investing: Finding the Winners of the Future, argues that the risk of investing in frontier markets is no greater than the risk in many markets that are considered to be emerging. According to the publication, valuations are more attractive and, therefore, opportunity for future returns is greater in frontier markets.

This latest publication from the Research Foundation can be viewed as a call to action for investors to not underestimate the potential of frontier markets. Many frontier countries have undergone a radical restructuring of their economies since the early 1990s, and, from an economic standpoint, frontier market countries are emerging rather than stagnating. Frontier markets can provide investors with a wealth of opportunities to identify stocks that have been ignored by the mainstream investment community.

“This latest Research Foundation book touches on the many investment opportunities that exist in frontier countries,” says Lawrence Speidell, CFA, author of the publication. “Included in the book are reviews of the stock markets, the listed companies, the potential returns, and the diversification benefits, as well as economic and political fundamentals. I hope that this effort provides support for those who are currently investing in these markets and encouragement for those who are contemplating doing so.”

“Looking ahead, these markets may represent the final frontier for global capital,” states Bud Haslett, CFA, executive director of the Research Foundation and head of Risk Management and Derivatives. “As the emerging markets of today move on to become part of the developed world, the stage is set to bring along a new set of emerging candidates from the frontier markets.”

(press release)

The Research Foundation of CFA Institute publishes books on a variety of timely subjects each year, which emphasize the research of practical value to the investment professional and provide a unique perspective on the rapidly evolving profession of investment management. Frontier Market Equity Investing.

CFA Institute
CFA Institute is the global association for investment professionals. It administers the CFA and CIPM curriculum and exam programs worldwide; publishes research; conducts professional development programs; and sets voluntary, ethics-based professional and performance-reporting standards for the investment industry. CFA Institute has more than 100,000 members, who include the world’s 90,000 CFA charterholders, in 135 countries and territories, as well as 135 affiliated professional societies in 58 countries and territories. Corporate website:Source
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