According to abrdn, frontier bonds, though volatile, can reward investors with substantial returns, often outperforming emerging market debt (EMD) due to their unique positioning in diverse, high-growth regions. “The bottom line is this: investors get paid to take on the additional risk,” said Leo Morawiecki, Associate Investment Specialist, Fixed Income, at abrdn.

The asset manager argues that frontier bonds offer access to dynamic and diverse market parts unavailable in a traditional EMD portfolio. With reforms in key markets like Kenya and Zambia, and supportive policies from institutions such as the IMF, abrdn views this as an opportune moment for experienced investors in frontier bonds.

Read the full assessment here.