Frontier Markets is an economic term which was coined by International Finance Corporation’s Farida Khambata in 1992. It is commonly used to describe a subset of emerging markets (EMs).
Frontier markets (FMs) are investable but have lower market capitalization and liquidity than the more developed emerging markets. The frontier equity markets are typically pursued by investors seeking high, long term returns and low correlations with other markets.
The implication of a country being labeled as frontier is that, over time, the market will become more liquid and exhibit similar risk and return characteristics as the larger, more liquid developed emerging markets.
Read more about Frontier Markets: Terminology, Investment Case, FTSE List, MSCI List, Standard & Poor's List
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