Frontier Markets which remain fairly misunderstood and undiscovered
From what Carlos Hardenberg told Citywire Selector in a recent interview, Africa (EZA) (GAF) is one of the frontier markets (FRN) (FM) where Franklin Templeton sees “a lot of opportunities.” Hardenberg is the director of frontier markets at Templeton Emerging Markets Group. The fund manager also sees similar opportunities in 3 Asian economies and 3 Latin American economies. According to Hardenberg, these markets remain “misunderstood and undiscovered.”
3 Asian markets where Franklin Templeton sees opportunities
In a recent article, we highlighted the key reason why fund managers are looking at Asian emerging markets right now. While Pakistan (PAK) and Vietnam (VNM) seem to be under the spotlight of many fund managers lately, Franklin Templeton’s Carlos Hardenberg identifies economies such as Cambodia, Sri Lanka, and Bangladesh as markets with opportunities presently. What’s particularly attractive about these markets is that they’re relatively undiscovered, which in a way, lends them more favorable valuations. Our articles, Revealed: Cambodia’s Most Promising Tech Startups and 5 Reasons Why Bangladesh Presents an Attractive Investment Opportunity offer more insights on these markets.
2 Latin American markets where Franklin Templeton is focusing
In Latin America, while the markets are usually abuzz with news and economic developments in the bigger markets such as Mexico (EWW) or Brazil (EWZ), smaller markets such as Peru (EPU) and Columbia (ICOL) are what offer opportunities, according to Franklin Templeton’s Hardenberg. Interestingly, Peru and Colombia have a higher spread of profitability than emerging markets globally. Even JP Morgan sees idiosyncratic opportunities in five markets, which include Peru and Columbia.
The Peruvian equity tracking iShares MSCI All Peru Capped ETF (EPU) is up 5.55% YTD (as of May 27), while the iShares MSCI Colombia Capped ETF (ICOL) has gained 11.5% so far this year.