The Middle East and North Africa region has been identified as a promising area for investors, with many economies experiencing healthy rates of growth, by Baring Asset Management, the investment firm that is part of the MassMutual Financial Group.

In its latest outlook, the firm forecasts that many economies in this region will enjoy strong  growth rates at a premium to developed or even emerging neighbours. Saudi Arabia and the United Arab Emirates were deemed the most attractive areas for investors, with particular stock selection opportunities in Saudi Arabia lying in the telecoms, healthcare, consumer and infrastructure sectors - markets where the government has announced its intention to increase spending to support growth over the medium and long-term.

In the UAE, the economy is driven by tourism and real estate, said the investment firm, due to recent unrest in countries such as Egypt.

Governments across the MENA region are investing in infrastructure, and a youthful middle class is emerging with a taste for consumer goods, therefore creating new opportunities for companies and prompting economic growth, said Barings.

Testament to this growth is the Baring MENA Fund, which has returned a cumulative 20.8 per cent in US dollar terms since its launch in 2010. “In the three years since we launched the fund, we’ve seen significant changes. Protests in Tunisia that year marked the beginning of the Arab Spring, which led to changes of government not just in Tunisia but Egypt, Libya and the Yemen too. While this may seem like a challenging investment environment, by navigating it carefully we have managed to generate significant outperformance of the benchmark index,” said fund manager Dr Ghadir Abu Leil-Cooper.

The fund invests across the region, with major holdings in the UAE  (22 per cent), Qatar (19 per cent), Turkey (18 per cent), Saudi Arabia (16.4 per cent), Kuwait (15 per cent) and Oman (6 per cent).