Baring Asset Management plans an Ireland-domiciled Ucits fund investing in frontier markets such as Nigeria, Saudi Arabia, the UAE, Sri Lanka and the Ukraine.
Michael Levy will manage the Baring Frontier Markets Fund and will be supported by Ghadir Abu Leil-Cooper, the head of Europe, Middle East and Africa.
Seeking returns from stocks that fall outside developed or emerging market benchmarks, the managers say they will consider broader political and economic factors as well as stock-specific criteria.
Barings says this low correlation with both emerging and developed markets, as well as low intra-country correlation, means that frontier markets also offer diversification benefits.
Levy adds: “Over the last 20 years, the free float market capitalisation of core emerging markets [MSCI Emerging Markets index] has increased 25 fold and we believe that frontier markets are now positioned where emerging markets were 20 years ago, poised to become the next big opportunity in the coming years.”
The fund will have a retail and institutional share classes. Barings says it plans to launch the fund within the coming weeks, subject to regulatory approval.
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