- Out of the top ten countries in terms of expected GDP growth through 2020, nine of those countries are African countries, namely: Malawi, Tanzania, Liberia, Kenya, Uganda, Madagascar, Zimbabwe, Mali, Zambia, & Egypt.
The S&P Africa Frontier index is the 2nd best in terms of performance over the past 10 years, when compared to other frontier and emerging markets’ investment performance indices. However, the S&P Africa Frontier index has the lowest correlation (0.102) with the S&P 500 index. S&P Africa Frontier’s low correlation with the broader markets makes this index an excellent choice for portfolio diversification.
The S&P Africa Frontier is a comprehensive benchmark including stocks from the sub-Saharan frontier markets of Botswana, Cote d’Ivoire, Ghana, Kenya, Mauritius, Namibia, Nigeria, and Zambia.
The S&P 500 is widely-regarded as the best single gauge of large cap U.S. equities. There is over $5.14T benchmarked to the index, with index assets comprising approximately $1.6T of this total. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
- Investments in Africa generated the highest rates of return in the world between 2006 and 2011.
- In terms of minimizing volatility, private equity is a preferable method to enter African markets, given the long-term nature of private equity investments.
Clifford Mpare is the Chairman and Chief Executive Officer of Frontline Capital Advisors, Ltd., an investment advisory and consulting firm based in his native Ghana. His company provides investment banking, asset management, and other related financial services to a wide variety of individual, corporate, governmental, and institutional clients.
Upon finishing high school in Ghana, he was encouraged by his father to further his education in Canada. He won a scholarship from Ghana’s government to study at St. Mary’s University in Halifax, Nova Scotia. After earning a Bachelor of Commerce degree there and an MBA from Dalhousie University, also in Halifax, Mpare began teaching finance and accounting at Wingate University in North Carolina.
He spent 30 years working in the United States, mostly in portfolio management. He helped take a North Carolina firm, NCM Carolina, from about $500M in assets in 1986 to about $6B in assets, by which time he was serving as its chief investment officer. His next step: Ghana, and an entire continent’s worth of opportunities.
Today, Mpare believes even more in the economic future of African nations. Over the past six years, he has lent his expertise to a number of projects throughout the continent by serving as a consultant in the development of innovative financial instruments, implementing policies for financial institutions and capital market reforms.