How to invest in the Africa growth story

Collective funds offer the most obvious route into African stockmarkets for UK investors, but there are a number of different possible approaches.

First, more than 80 open-ended funds offer investment specifically in African equities (many of them listed offshore). Check their portfolios carefully, however, as most of these funds are heavily weighted towards South African equities rather than the true frontier markets.

JPMorgan's Africa Equity fund, for example, has 89% invested in South Africa, Nigeria and Kenya, while the Neptune Africa fund has 81% in South Africa and Nigeria.

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Alternatively, several global emerging markets funds - both open-ended and in the investment trust universe - offer good Africa exposure, alongside holdings in other frontier and emerging markets. In the open-ended sector, these include Fidelity EMEA, with a 47% weighting towards Africa, while investment trust possibilities include Advance Frontier Markets (40% invested in Africa) and BlackRock Frontiers (23% invested in Africa).

Financial advisers have their own favourites. "African funds I like are Neptune Africa and Templeton Africa," says Darius McDermott. "For investors wanting access to the market in a more diversified fund, Franklin Templeton Frontier Markets fund and the Fidelity EMEA fund are worth a look."

Gordon Bowden of Quainton Hills adds: "The Neptune Africa fund gives a more diverse exposure across Africa - a high allocation is to South Africa, giving some comfort in investing in a more stable western-style economy."

Another option is an exchange traded fund (ETF). The London-listed db X-tracker MSCI EFM Africa Top 50 Index ETF, for example, offers exposure to South Africa, Nigeria and Egypt.

The RBS Emerging and Frontier Markets Africa ex South Africa ETF has allocations to Egypt, Nigeria and Kenya, among others (but not South Africa), and is eligible for ISAs and SIPPs despite being listed in Germany. Standard Bank, meanwhile, has several similar vehicles listed on the Johannesburg Stock Exchange.

In addition, HSBC, Lyxor, Credit Suisse, iShares and RBS all offer South Africa-focused ETFs listed in London.