Emerging market investors eye frontier assets shielded from Trump’s tariff threats

Amid growing global uncertainties, including rising U.S. tariffs and geopolitical tensions, investors are increasingly looking toward frontier markets, which are less affected by U.S. policy shifts. These markets, primarily in smaller developing countries across Africa, Eastern Europe, Asia, and Latin America, offer promising opportunities, with some like Zambia, Ghana, and Sri Lanka benefiting from emerging from debt defaults. Experts suggest these regions are shielded from the direct impact of U.S. tariffs, making them appealing investments.

Countries such as Serbia, Turkey, and South Africa are highlighted for their strong economic growth, making them attractive bets for investors despite being outside the frontier market category. Serbian bonds, for instance, are drawing attention due to the country’s growing economy, while Turkey’s shift to orthodox fiscal policy and South Africa’s diverse exports provide potential stability. However, some larger emerging markets may still face challenges due to their exposure to global political and economic shifts.

Not all frontier markets are seen as safe from risk, though. Countries like Mexico, Vietnam, and Malaysia could be targeted more heavily under Trump’s trade policies, which could lead to shifts in investor behavior. Overall, frontier markets remain a preferred choice for diversification and high yield, with many anticipating local dynamics to drive returns in 2025.

source: REUTERS