We believe frontier markets have a natural place in an investor's global portfolio considering the long-term fundamentals and low correlation to other equity indexes. The macro fundamentals and demographics in many frontier markets today are favorable, and these economies have the potential to grow much faster than those in the developed and emerging markets universes. While the current global crisis brings investment opportunities, and the long-term growth outlook of many companies remains underpriced, we acknowledge that there will be individual winners and losers. Careful stock picking is therefore key and forms the core of everything we pursue.

In frontier Asia, we remain optimistic on the outlook for Vietnam. Following a challenging period with the coronavirus omicron variant and restrictive containment measures, we are pleased to see a catch-up in the vaccination rate and improving consumer sentiment on the ground. We believe that the country offers a very attractive long-term opportunity and find many compelling bottom-up ideas across sectors. Our holdings are focused on those companies that we believe are most able to execute well and benefit from the economy's strong structural growth potential.

We have become more optimistic on the outlook for Bangladesh following the loan program request it is working on with the IMF. This is due to the effects of rising inflation and declining foreign reserves on the country. We believe that the economy is well positioned for growth, and we are able to find companies with favorable valuations.

In frontier emerging market Pakistan, we are keeping a close eye on macroeconomics and geopolitics, particularly given the country's twin deficits, rising inflation, and currency depreciation. However, the government has agreed to tough adjustments in order to secure a USD 6 billion bailout package from the IMF. We focus on high-conviction ideas with strong bottom-up fundamentals, which are predominantly export businesses (meaning that they, in fact, benefit from currency weakness).

In Africa, Nigeria remains uninvestable despite the oil price, largely due to the strict capital controls that are in place. The equity market in Kenya is dominated by Safaricom, a large fintech provider, which was able to grow its services before and during the pandemic. We are concerned about the authorities' management of the economy and the currency.

In frontier emerging market Egypt, we are worried about the near term given the global forces at play. The economy is particularly vulnerable to the impacts of Russia's invasion of Ukraine. However, support from the IMF and select Gulf states should help the country to weather this challenging period.