In a communication to professional investors, John Morton, head of emerging markets fixed income at FFTW – a BNP Paribas investment partner – offered his views on where the “significant, untapped investment opportunities” exist for investors in emerging markets debt.
“Among the bigger players are formerly neglected countries, commonly referred to as ‘frontier emerging markets’,” Mr Morton wrote.
“For example, there are a number of African states, such as Gabon, Angola, Nigeria and Ghana, which are far from traditional, ‘go to’ emerging markets, but are now in the early stages of accessing the global financial markets.”
These “emerging-emerging” economies may provide investment opportunities – particularly for global emerging market debt investors – as they become more “significant destinations to do business”.
The communication also advises that emerging market debt investors “not limit themselves by buying only traditional debt vehicles”.
“Investors should look for value wherever they can find it, whether it be Treasuries, corporates, large private loans or the like, traditional or non-traditional,” Mr Morton wrote.
“They should carefully research every viable opportunity thoroughly and, if it offers above-average, risk-adjusted performance over time, they should add it judiciously to their portfolio.”
