UK wealth managers and financial advisers expect clients to ramp up allocations to emerging and frontier markets within the next 18 months, according to a study by Pureprofile, commissioned by Vietnam Enterprise Investments Limited (Veil) owned by Dragon Capital, a Vietnam-focused fund manager.
The survey, conducted on 50 wealth managers and 50 IFAs/financial planners in the UK, highlighted that 64% of respondents foresee client allocations to these markets increasing by 10%-15%, as investors look to capture growth opportunities in developing economies.
Two-thirds of wealth managers and advisers noted that clients are currently underweight in emerging markets, suggesting ample room for increased exposure. Over a longer horizon, 92% of those surveyed expect emerging and frontier markets to outpace growth in developed economies over the next five years.
Emerging markets lead hedge fund gains
A key driver behind this outlook is the expanding middle class in emerging economies, which respondents identified as the primary attraction. Additionally, many emerging and frontier markets are perceived as undervalued, offering potential for value-driven investments. Wealth managers also believe these markets will greatly benefit from technological advancements, in some cases surpassing gains seen in developed markets. Other appealing factors include increasing stability and significant foreign direct investment (FDI) inflows into several frontier economies.
In frontier equity markets, 99% of survey participants agreed that these environments are ripe for active fund managers to outperform, as limited company disclosures and low analyst coverage provide opportunities for managers with strong research capabilities to add value. By the end of 2025, nearly all surveyed wealth managers and advisers (93%) anticipate that their clients will be overweight in emerging markets.
“Many emerging and frontier markets are dynamic and enjoying rapid positive change and growth. This represents an exciting opportunity for active investors,” said Tuan Le, lead portfolio manager of VEIL. “Our research shows that many wealth managers and IFAs expect clients to increase their exposure to these markets.”
Vietnam exemplifies this growth potential, with recent economic indicators showing strong recovery, highlighted the researchers. Exports have risen 14.5% year-on-year, and industrial production has surged. These developments, along with heightened public investment targets set by the Vietnamese government, underscore the investment appeal of frontier markets like Vietnam, which Veil has been capitalising on as a closed-end fund listed on the London Stock Exchange.
