CHAPTER 5

Frontier Markets

The Next Emerging Markets

Overview

Two thousand years ago, everything outside of Rome was a frontier market. Three hundred years ago, everything outside of Europe was a frontier market. The emerging countries of today were the frontier as recently as 30 years ago. Now, we’d say that any country outside of the MSCI All Country World Index is a frontier market, at least from the perspective of investors in the advanced economies and especially in the United States.

Lawrence Speidell* argued that the United States, as the leading economy in the world as measured by both capitalization and trading volume, was a frontier market in 1792. At the time, the Buttonwood Agreement was executed at an outdoor location, under a buttonwood ...

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