| Fidelity's Asia Fund lists Bangladesh as frontier market Star Business Report
Emerging Asia Fund, launched by Fidelity Investments Management (Hong Kong), lists China, India, Malaysia, Indonesia, Thailand, and the Philippines as emerging markets while Pakistan, Vietnam, Bangladesh, and Sri Lanka are listed as the frontier markets.
The Fidelity, however, hasn't set a target size of the fund and said it expects to initially invest the bulk of the portfolio's assets in the emerging, rather than the frontier markets, due to 'limited opportunities' at the moment, says Teera Chanpongsang, who will manage the fund on behalf of Fidelity.
The fund will be looking for stocks that fit four investment themes: domestic consumption, exposure to China and India growth, infrastructure spending, and new frontier markets.
Chanpongsang expects that Vietnam, Bangladesh, Sri Lanka, and Cambodia will be part of the MSCI (Morgan Stanley Capital International) Emerging Asia Index in three to five years. The index is designed to measure equity market performance in global emerging markets.
Chanpongsang counts demographics as one of the opportunities presented by emerging and frontier markets in Asia.
In Pakistan, Bangladesh, the Philippines, Malaysia, India, Vietnam, and Indonesia, more than 50 percent of the population is below the age of 25. This segment of population in these markets will constitute their labour force in the coming years and will be the ones to support consumer growth.
In Pakistan, Bangladesh, the Philippines, Sri Lanka, Vietnam, and Indonesia, more than 60 percent of GDP is driven by domestic consumption and this is a trend that Chanpongsang expects to continue. |