Frontier emerging markets are small countries, but they have delivered some big-league performance returns of late.
Over the past year, frontier markets have outperformed stocks from Japan, Europe, and the U.S.
The term “frontier market” began to take root in the early 1990s to describe countries that are a subset of emerging markets but with lower market capitalizations and less liquidity.
Historically, emerging markets have been dominated by BRIC countries (Brazil, Russia, India, and China).
But after years of high growth, BRICs have aging populations, slowing growth, and increased market correlations to developed markets.
Major index providers like FTSE and MSCI classify countries like Argentina, Bangladesh, Nigeria, Slovenia, and Vietnam as frontier markets. At times, there will be differences in opinion.