Frontier markets are emerging as a key opportunity for investors in 2026, according to a report by Bloomberg citing Jens Nystedt, Chief Investment Officer, Long-only funds at hedge fund Kirkoswald Asset Management.
Speaking at Bloomberg’s Emerging Markets Investment Forum in New York, Nystedt said the firm sees attractive value in local currency-denominated assets across frontier economies, where relatively shallow market liquidity can amplify the impact of even modest capital inflows.
After countries such as Egypt and Turkey attracted strong investor interest last year, Nystedt suggested attention may now shift toward markets including Zambia and Nigeria, where improving fundamentals and limited foreign participation create asymmetric return potential.
Kirkoswald, the hedge fund founded by Greg Coffey, was among the managers to outperform in 2025 by deploying macro-driven strategies across emerging and frontier markets.
Frontier assets delivered strong performance last year as several sovereigns strengthened fiscal positions, easing concerns around default risk. The asset class also benefited from perceptions of insulation from global trade tensions and broader geopolitical volatility.
Nystedt noted diverging outlooks across major emerging economies. He welcomed Chile’s newly announced cabinet, citing a high proportion of independent appointments as a positive signal for policy stability.
By contrast, Brazil and Turkey were described as sitting at opposite ends of the opportunity spectrum. Turkey continues to benefit from relatively low debt-to-GDP levels and improving macro dynamics, while Brazil faces greater fiscal uncertainty ahead of general elections scheduled for October.
Nystedt said clarity around Brazil’s political outlook could significantly alter market pricing, adding that known election outcomes would likely steepen the yield curve materially or allow the central bank to implement aggressive rate cuts.
