Frontier markets equities have extended their gains over developed and emerging markets in 2014. Through Aug. 19, frontier markets returned 21.5% -- more than three times that of developed markets, as measured by the MSCI ACWI index. The MSCI Emerging Markets index was up 10.3%.
In 2013, the MSCI Frontier Markets index returned 25.9% vs. the MSCI ACWI index, which gained 23.5%, while the emerging markets index fell 2.3%.
The increase in the frontier index has been driven largely by gains in Kuwaiti finance companies -- the index's two largest constituents -- National Bank of Kuwait (7.2% index weight), up 22%, and Kuwait Finance House (5.5%), up 19%.
Among the top-five countries represented in the index, Argentina has the highest returns year-to-date (17%), despite the country's second default in 13 years.