The content on this page is marketing communication. Investment in funds always involves some kind of risk. Past performance is no guarantee for future performance. Fund units may go up or down in value and investors may not get back the amount invested.

Insights from Our Mini-World Tour of Global Frontier Markets

This year, the East Capital Global Frontier Markets team has had a packed schedule, seeing companies in Vietnam, Sri Lanka the UAE, and Saudi Arabia, along with dozens of virtual meetings with companies and their managements.

A major highlight was our visit to Ho Chi Minh City in Vietnam for a prominent annual investor conference, which set new records for both investor attendance and the number of companies presenting. Although Vietnam has experienced significant turbulence in its real estate market over the past two years, the economy still managed to grow by 5% last year. With a robust growth rate of 5.7% in Q1, expectations are high for a rebound to 6.0% this year. Equity market performance has been strong in the early part of this year, up 14% in USD, before a recent downturn due to renewed concerns over the real estate sector and global equity market fluctuations. Despite this, our Vietnamese portfolio companies are up 15% on average, and we remain bullish about the long-term potential of the market, underscored by a current P/E of just 10x and potential market upgrades by the FTSE in 2024-2025 which could attract foreign investors.

After Vietnam, we attended another investor conference in Sri Lanka and met with 12 companies not only from Sri Lanka but also from larger frontier markets such as Bangladesh and Pakistan. These markets experienced considerable volatility, but current dynamics and company sentiment suggest that the worst is behind us. Sensible, market-friendly policies appear to be fostering improved equity market performance. Pakistan and Sri Lanka have posted strong equity market returns of 76% and 39% in USD terms respectively since last year. Despite these impressive figures, most of the companies we met are trading at only 3-6x forward earnings, a compelling case for active stock pickers like us.

In Colombo, Sri Lanka, we visited the Port City, a massive real estate development funded by Chinese investment that aims to transform the city into a Dubai-like area built on reclaimed land. Operating as a special economic zone with tax incentives for exporters, it's adjacent to the Colombo port, which is undergoing significant expansion to enhance Sri Lanka’s global shipping capabilities, taking advantage of its strategic geographic location. It should come as no surprise that this kind of visionary investment is laying the groundwork for further economic growth in the decades to come.

Insights From Frontiermarkets 730X480 (1)
Top left: Alexander Gyllenberg and Emre Akcakmak attending the Frontier Asia Investor Conference in Colombo, Sri Lanka. Top right: Ho Chi Minh City, Vietnam. Bottom right: Emre Akcakmak's on his way to meetings in Sri Lanka.

After Sri Lanka, we travelled on to the UAE for what is arguably the largest global conference on frontier and small emerging markets conference and held in Dubai. Conversations with company managements primarily focused on the positive economic cycles and massive investment projects in several GCC countries, which are expected to maintain their high economic growth for years to come and gradually reduce their oil dependence - part of a decadeslong strategy that is now coming to fruition with significant reforms, particularly in the UAE and Saudi Arabia. Surprisingly for investors unfamiliar with regional dynamics, there was little talk of geopolitics as the strong pro-business environment and flourishing equity markets with new IPOs dominated the agenda of informed investors.

At these conferences, we engaged with nearly all our portfolio companies from over 15 countries, almost 80 companies in total. While a few face challenges in growing their businesses for specific reasons, the majority are either stable or in a fast-growth phase, supported by favourable investment climates. Frontier markets had a phenomenal year in 2023, with East Capital Frontier Markets delivering a 23.1% gross return in USD and a promising start to 2024 with a further return of 11.5%. Despite recent performance, we remain excited about the vast opportunities presented by these markets, which offer favourable demographics, high economic growth rates, low correlations, and attractive valuations, with an expected earnings growth of 12% in 2024 and a 12-months forward-looking P/E of only 8.1x, making them ideal for investors with a long-term horizon.

This is marketing communication. This publication is not directed at you if we are prohibited by any law in any jurisdiction from making this information available to you and is not intended for any use that would be contrary to local laws or regulations. Every effort has been made to ensure the accuracy of the information in this document, but it may be based on unaudited or unverified figures or sources. The information in this document should not be used as the sole basis for an investment. Please read the Prospectus and the KID, which are available on the fund page at before making any final investment decision. Past performance is no guarantee for future performance. Fund units may go up or down in value and may be affected by changes in exchange rates. The presentation is only informative and is not considered to be providing any financial advice.

Related articles

East Capital Group expands its Investment Management team and its focus on frontier markets with senior recruit Alexander Gyllenberg
H2 2023 Impact Report - East Capital Global Emerging Markets Sustainable
Transformers for transformers – the key bottleneck in AI development?
Comment on Q1 2024: AI remains in the driver’s seat
Update from China – are there positive signs ahead in the Year of the Dragon?