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.
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Famous quotes containing the words frontier and/or markets:
“It is very perplexing how an intrepid frontier people, who fought a wilderness, floods, tornadoes, and the Rockies, cower before criticism, which is regarded as a malignant tumor in the imagination.”
—Edward Dahlberg (1900–1977)
“A free-enterprise economy depends only on markets, and according to the most advanced mathematical macroeconomic theory, markets depend only on moods: specifically, the mood of the men in the pinstripes, also known as the Boys on the Street. When the Boys are in a good mood, the market thrives; when they get scared or sullen, it is time for each one of us to look into the retail apple business.”
—Barbara Ehrenreich (b. 1941)