The excerpt below has been taken from Mark Mobius' blog. He is the Executive Chairman of Templeton Emerging Markets Group.
Of the 10 countries estimated by the International Monetary Fund, or IMF, to have achieved the fastest economic growth between 2003 and 2013, eight were frontier markets, with China and India being the other two.
In the current environment, a number of countries are undergoing positive developments while headwinds remain for others. Headlines of conflict and tension in some emerging and frontier markets continue to affect overall investor sentiment. At the same time, the improving macro environment and lower political risk have benefited individual economies (Sri Lanka and Bangladesh being two examples). In recent days, major world powers have been discussing a United Nations Security Council resolution to lift sanctions against Iran. Meanwhile, planned economic reforms and a new IMF loan programme could further promote Pakistan as an investment destination.
While we don’t know what the future will bring, this demonstrates to us how important active management—including on-the-ground research and a bottom-up stock selection process—is when it comes to investing in emerging and frontier markets.
Source: IMF. Calculated as on October 2014. The ranking excludes countries with a population of less than 10 million.
To read Mark Mobius' views, on the growth potential of specific economies, click on the links below.
