The Cricket World Cup (“CWC”) has captured many attentions since blasting off two weeks ago but most agree that it’s not until the quarter finals that the real results matter. However, yesterday in Match 17, a country at war for 30 years beat a still dependent member of the United Kingdom. Not unlike the recent vote, it came down to the last few moments.
Interestingly, of all test playing cricket nations, only England is north of the equator or certainly north of the Tropic of Cancer. There can be no doubt long term weather patterns play an important part in building a long term track record in what is essentially a game that requires sunshine and warm weather!
In looking at the world from an asset allocation perspective we can’t ignore frontier markets. The developed world has had a tailwind over the past 100 odd years but the growing importance of China and its BRICS partners cannot be ignored for the next 100 years. The term frontier market is used to define a country that is more developed than basket cases but too small to generally be considered an emerging market just yet. Chinese PMI and GDP data is more important Bloomberg news than the UK from a global investor perspective.
As Afghanistan has proven at the CWC, these frontier markets should be ignored at your peril. Even a country at war for 30 years can surprise on the upside!
Weekly Comment Week 9 2015 - Afghanistan beats Scotland - SC.pdf
According to Wikipedia
The term “Frontier Market” is commonly used to describe the equity markets of the smaller and less accessible, but still “investable”, countries of the developing world. The frontier, or pre-emerging equity markets are typically pursued by investors seeking high, long-run return potential as well as low correlations with other markets. Some frontier market countries were emerging markets in the past, but have regressed to frontier status.
