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M&G looks to frontier markets

M&G’s cautious multi-asset offering is investing a small part of its portfolio in a Guernsey-based fund which focuses on minor emerging markets.

Advance frontier markets is a listed closed-ended fund comprising other funds and segregated mandates investing in regions such as Dubai, Venezuela and Zimbabwe.

These are known as frontier markets and fit with M&G head of equity investment David Jane’s view that emerging markets, rather than developed countries, will be a key driver in getting the global economy out of recession.

Frontier markets are less sensitive to the global economy than mainstream emerging markets and M&G stands to reap the rewards if the advance fund’s current discount to net asset value narrows.

Jane says: “Advance frontier markets specialises in tiny markets that will outperform in the long term. These markets have already outperformed established emerging markets. The fund is currently trading at a significant discount to its net asset value, as are some of the funds in which it invests.”

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