Financial Advisor Magazine
by Evan Simonoff
July 26, 2013
International economist Dambisa Moyo gave a persuasive argument for why financial advisors should look at so-called frontier markets for investment opportunities and uncorrelated returns.
Moyo made her compelling case for investing in nations on the periphery of traditional emerging markets at the fourth annual Innovative Alternative Investment Strategies conference in Denver on July 22.
The average level of government debt in 11 frontier market nations, among them Turkey, Vietnam, Nigeria, Indonesia, Mexico, Iran and the Philippines, is 43 percent, compared with 90 percent in the U.S. and more than 100 percent in many European countries, Moyo noted.
Moreover, the demographic contrast between the West and frontier nations is dramatic. In Africa, for example, 60 percent of the population is under 25 years old. The problem of welfare and social insurance payments exists in the distant future, only if these countries embrace Western style programs. So far, many haven’t. Europe alone accounts 7 percent of the world’s population and 50 percent of its welfare and social insurance payments, Moyo said.