The majority of investors may well raise an eyebrow over the prospect of putting money into a frontier market, given the inherent risks associated with economies that are so sensitive to macro conditions.
However Wilson, chairman of the Qatar Investment Fund, says that the huge amount of infrastructure spending required to host the World Cup over the next nine years means the future looks positive for Qatari markets.
Wilson is positive about the prospects for Qatar’s massive infrastructure projects due to the country’s huge budget surplus.
"Qatar is expected to spend $243bn in local projects over the coming years," he said. "They are building a new city called Lusail, which is going to provide housing for roughly the equivalent of the population of Edinburgh."
"They are also building a new airport which will have a customer capacity of 24 million, plus they are building a new metro railway to link to the airport."
"Investment on this scale in Qatari infrastructure can only stimulate demand and growth among listed Qatari companies, including the banking sector."
"With an estimated £150bn earmarked for infrastructure spending up to 2022, investors should see the fruits of this as public company profitability responds," he added.
Wilson boasts that his investment trust is the only way UK investors can gain direct access to the Qatari market.
It was launched in July 2007 and over that time it has returned 31.8 per cent. The fund does not have a specific benchmark, but as a point of comparison, the MSCI Frontier Emerging Markets index is up 8.25 per cent over this time.
Performance of trust vs index since July 2007
Source: FE Analytics
Wilson says the outlook for Qatari equities looks exciting, as the population dynamic is supportive of a prospering economy.
"Unemployment levels are among the lowest in the world and the demographics look very good compared to the developed economies where they have an ageing population," he said.
"This is backed up by high levels of consumer sentiment in the country, as the recent survey showed that 96.9 per cent were optimistic, against 81 per cent for the Middle East as a whole."
"This is very good for the economy and we are gaining that exposure by having a high weighting to the banking sector."
Wilson says the financial sector offers the best investment to benefit from the long-term growth theme. He is bullish on Qatari banks as they make up around 50 per cent of the portfolio, which is overweight compared with the market.
His largest individual position is in the state-owned commercial bank, Qatar National Bank (QNB), which makes up 18 per cent of the closed-ended fund’s assets under management.
"The banking sector in Qatar has long been a pillar of the economy and remains an effective way for investors to gain exposure to its growth," he added.
Wilson says that valuations are still very attractive, especially as the income potential in Qatar is positive.
He commented: "Despite the compelling economic outlook, the Qatar stock market still trades on an undemanding valuation, with a price/earnings ratio of 10.7x 2013 forecast earnings and a forecast 2013 dividend yield of 5.5 per cent."
"Other markets in the region, such as Saudi Arabia and Kuwait, trade on 12.3 and 14.4x estimated 2013 earnings respectively, and both yield less than Qatar – Saudi Arabia’s yield is 4.1 per cent; Kuwait’s is 3.2 per cent."
Qatar Investment Fund has ongoing charges of 2.15 per cent and is £205m in size. It is not geared.
Its discount has widened significantly over the course of the year, to 17 per cent.
Andrew Lister, senior investment manager at Advance Emerging Capital, says that discount means the trust is an attractive investment.
"We run the Advance Frontier Markets trust, which is a fund of funds," he said.
"We either buy open-ended funds run by locally sourced, best-of-breed type managers who can add value via stockpicking, or we look to closed-ended funds that are out of favour with the rest of the market."
"We are happy to sit and hold these trusts until that area of the market becomes more popular and the discount narrows."
"The Qatar Investment Fund is one we like in the Middle East, especially as it is trading on a wide discount. Post the 'Jasmine Revolution', Qatar has proved to be one of the wealthiest economies in the region that doesn’t have that level of political risk."
"The hydro-carbon story in Qatar looks promising and we feel it is a relatively safe bet for the Middle East, so we are happy to hold it in our portfolio," he added.
The Qatar Investment Trust makes up 5.3 per cent of the Advance Frontier Markets investment trust.
