Schroders has launched a frontier markets fund co-managed by head of emerging market equities Allan Conway and Mena head Rami Sidani.
The Luxemburg Sicav Schroder ISF frontier markets equity fund is benchmarked against the MSCI frontier markets index and uses the same investment process as the firm’s global emerging markets range.
Conway and Sidani run the Schroder ISF Middle East fund. Sidani is based in Dubai and both managers are supported by analysts based in Dubai, Europe, Latin America and Asia.
Conway says: “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.”
According to Schroders, frontier markets have a combined nominal GDP of £2.4tn, 3.9 per cent of global GDP, second only to China, and comprise 12 per cent of the world’s population of which almost 60 per cent are under 30 years of age.
Hargreaves Lansdown investment manager Ben Yearsley says: “Frontier funds were on the cusp of acceptance before the credit crunch and it seems they are appearing on the radar once again.
“My view is that these types of funds are best suited to an investment trust/closed-ended structure, given the liquidity issues associated with them.”