OREANDA-NEWS. March 09, 2012. Renaissance Asset Managers, the investment management business of the leading emerging markets integrated investment firm, Renaissance Group, today announces the launch of the Renaissance Frontier Markets Fund, rated A by Standard & Poor’s fund management, in its Luxembourg-based UCITS IV SICAV fund range.

Renaissance Asset Managers (“RAM”) believes that frontier markets provide an attractive investment proposition for investors and has identified at least 25 countries with a forecast GDP growth of over 4 per cent, which RAM believes is what these countries are capable of growing at and is a level at which more opportunities for companies and better stock market performance will be created1.

From these 25 countries, the Fund will invest into a focused yet diversified investment universe of countries that meet a set criterion, such as Argentina, Egypt, Indonesia, Kenya, Nigeria, Pakistan, Philippines, Thailand, Ukraine and Vietnam. These countries form the core “Focus Ten” of the Fund and expect to make up between 85 and 100 per cent of the portfolio at any point in time. They represent high growth markets with good consumer bases. As economies and per capita income grow, companies operating in these markets have the potential to experience accelerated growth in earnings. RAM has also selected these countries based on a number of other set criteria including:

Population in excess of 35 million

GDP growth over the next decade expected to average over 4% per annum2

GDP per capita below USD  6,0003

Markets are relatively undeveloped

Substantial potential in terms of a young population, attractive resources and the ability to develop based on these criteria

Taking Nigeria as an example, the country boasts a population of 160 million with over 50 per cent falling in the 15-64 years age bracket. Its current literacy rate is at 72 per cent and an unemployment rate of only 5 per cent4. The 5 year annual average GDP growth rate is 6.6 per cent, more than the rate of population growth, so its population is likely to become better off and lead to higher consumer spending and a more qualified workforce5.

RAM also recognises that with underdeveloped regions come development opportunities, particularly in infrastructure, telecoms and commodities. Nigeria, for instance, has oil, gas and huge agriculture potential; Vietnam has agriculture and mineral resources as does Argentina. With low market penetration and saturation levels, the Fund represents one of the most interesting investment propositions for investors.

1 Forecast GDP growth of over 4 per cent has been selected as a criterion as it is the highest level that world GDP growth achieved in the past decade. Only those countries that are forecasted to grow above this level over the next decade are considered for the Fund.

2 Bloomberg

3 CIA fact book

4 UN statistics data base

5 Thompson Reuters Datastream