# What are frontier markets?

> Frontier markets are investable economies that are less developed or less liquid than emerging markets but may offer early-stage growth exposure.

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Last reviewed: 2026-06-22

Frontier markets are public or private investment markets that are smaller, less liquid or less institutionally developed than emerging markets. Many African exchanges are often discussed as frontier markets because they can offer growth exposure but may have lower liquidity, higher currency risk and less analyst coverage.

## How frontier markets differ

Frontier markets may have fewer listed companies, lower trading volumes, more concentrated sectors and higher operational complexity. They can also be underrepresented in global portfolios.

## Why investors pay attention

Investors may look at frontier markets for demographic growth, financial inclusion, infrastructure investment, consumer expansion and diversification away from developed-market cycles.

## Key points

- Frontier markets can offer growth exposure with higher risk.

- Liquidity, currency and governance risks require extra diligence.

- Diversification and position sizing are especially important.

## Caveats

- Frontier market definitions vary by index provider and institution.

- Higher growth potential does not remove the risk of permanent capital loss.

## FAQ

### Are all African markets frontier markets?

No. Classification depends on the index provider and criteria such as liquidity, openness, custody infrastructure and market accessibility.

### Are frontier markets riskier than emerging markets?

Often yes. They may have lower liquidity, higher currency risk and less developed market infrastructure, although risks vary by country and asset.

## Related

- [African stock exchanges](https://mystocks.africa/african-stock-exchanges)
- [USD investing in Africa](https://mystocks.africa/usd-investing-africa)
- [Data catalog](https://mystocks.africa/data)
- [African ETF guide](https://mystocks.africa/africa-etf)