Nigeria Beats BRICs as Mobius Expects Frontier Rally

The MSCI Frontier Markets Index rose 11 percent this year, outpacing the MSCI Emerging Markets Index by 9 percentage points, the widest gap since the second quarter of 2005. The gauge of shares from Ukraine to Kenya and Vietnam trades for 1.5 times net assets, a 29 percent discount to the MSCI emerging index, which is dominated by Brazil, Russia, India and China.

Frontier markets are outperforming even as analysts cut “buy” ratings this year in 10 of 14 countries tracked by Bloomberg and forecast earnings will trail those in the so- called BRIC nations. The estimates ignore the boost to profits from rising commodities and consumer demand in the smaller markets, making them among the best “contrarian” bets, said Mobius, who oversees about $34 billion in developing nations.