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Patience Required for Frontier Markets Opportunities

Those who hope to benefit from frontier-markets investing must have an appetite for risk and a long time horizon.

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"I get more excited every time I visit frontier-market countries," said Laura Geritz, lead manager of Wasatch Frontier Emerging Small Countries (WAFMX). That sentiment was shared by her fellow panelists at the 2015 Morningstar Investment Conference: Pradipta Chakrabortty, who oversees  Harding Loevner Frontier Emerging Markets (HLFMX), and Taizo Ishida, the lead manager of  Matthews Asia Growth (MPACX).

In explaining their enthusiasm, the managers noted several features of frontier markets. The countries' populations are big and skewed toward the youthful end of the spectrum. That translates into significant opportunities for companies that are able to tap into consumption growth, such as a cookie-maker in Bangladesh held by Chakrabortty.

Alec Lucas does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.