Schroders has launched a £53 million ($82 million) fund to capitalise on the investment potential of the frontier markets, with a particular emphasis on Kuwaiti and Qatari stocks.

In addition to these two markets, the Schroder International Selection Fund Frontier Markets Equity vehicle, which will be managed by Alan Conway and Rami Sidani, will also have exposure to countries such as the UAE, Nigeria, Argentina and Pakistan.

Schroders believes that there is a strong case for investing in the frontier markets for several reasons, not least the fact that, combined, these markets have a nominal GDP of $2.4 trillion and represent 12 per cent of the global population, 60 per cent being under 30 years of age. Added to these strong fundamentals are competitive labour costs, abundant natural resources and the fact that frontier markets are under-owned, market liberalisation is picking up pace and valuations are attractive, the firm says.

Conway is Schroders’ head of emerging market equities, while Sidani is its head of MENA, and together they already run the Schroder ISF Middle East fund.

“Investors are increasingly seeking to establish a strategic allocation to emerging markets rather than using them tactically due to an increase in risk appetite, which we believe should lead to greater focus on the frontier markets. The launch of the frontier markets fund strengthens our global emerging markets proposition and offers investors access to some of the fastest growing economies in the world as well as significant diversification benefits,” Conway said in a statement.