The opportunities that an investment in Frontier Markets offers can be summarized as a growth story at a good price. To get a sense of how the growth expectations within frontier markets compare with growth across the world, we examine the World Bank’s growth expectations for different countries and groups.

The chart above highlights that all but one of the Frontier Market countries have higher growth expectations than the U.S. and other advanced economies. We can also see that many are higher than the world average, which indicates that these economies tend to be a positive influence on the global average.

Frontier Market equity returns since inception have been less efficient when compared to U.S. equity market returns, but have still seen periods of very strong growth.

Closely tied to the growth opportunity in Frontier Markets are the demographics, which have been shown to be a driving factor in GDP growth across many studies. 2 Much of the growth story in these markets is driven by their relative youth.

Eoin Treacy's view

Here is a link to the full report. 

Economic growth is important, particularly for emerging and frontier markets because of the base effect. It is simply easier to go from 50₵ a day to a $1 a day than it is to go from $10 - $20. With small markets liquidity is an issue and therefore one has to have some long-term perspective when participating and also to buy at the right time. One is reminded of the Baron de Rothschild quote “buy when there is blood in the street, even if it is your own”.

The clearest argument for not investing in frontier markets is there is no clear evidence that economic growth correlates with stock market performance. What I believe many people still do not understand is that there is a clear correlation between improving standards of governance and long-term stock market performance. If governance improves, defined by respect for property rights, support for minority shareholder interests through an independent judiciary and a free press to help air public corruption, then economic growth generally follows and with it, stock market performance. The long-term outperformance of India versus China despite the latter’s outsized economy growth is a clear case in point.