Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20
Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
From Trump’s TikTok Mess to US Tech Cold War against China - 7th Sep 20
The Federal Reserve vs. Judy Shelton And Gold - 7th Sep 20
Fed Dials Up Inflation Target…Own Gold - 7th Sep 20
Does Gold Still Have Plenty of Potential? - 7th Sep 20
CDC Shock Admission - THERE IS NO PANDEMIC! Over 90% of Deaths NOT From COVID19 - 7th Sep 20
Stock Market SPX to Gold/Silver Ratios Explored – What To Expect Next - 7th Sep 20
Is the Precious Metals Market really Overwhelmed and Chaotic - 7th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Investing in the Frontier Emerging Markets with ETFs

Stock-Markets / Emerging Markets Aug 06, 2009 - 07:30 AM GMT

By: Money_and_Markets


Best Financial Markets Analysis ArticleRon Rowland writes: As a Money and Markets reader, you probably know an awful lot about “emerging markets.” They’re the countries that aren’t quite as modernized as the U.S. but are developing fast: China, Brazil, India, Russia, etc.

But there’s another tier further down the pecking order: The “frontier markets.” These countries have developed their capital markets in just the last few years. They’re risky, but the growth potential is huge!

The frontier can be a dangerous place.
The frontier can be a dangerous place.

Until very recently the frontier markets were extremely difficult for Americans to trade. You can’t just log into your online brokerage account and buy a stock in Namibia. Nor should you … the risks are too great.

But now, thanks to exchange-traded funds (ETFs), you can easily buy a diversified portfolio of frontier market stocks in one simple package. More on that in a moment. First …

Where, In This Fast-Shrinking World, Is There Any Frontier Left To Tackle?

Today’s technology means that events in the remotest parts of the world seem only as far away as your satellite dish. So you might think that all of the frontiers have disappeared.

Actually there are several dozen frontier markets. And all of the index providers have their own specific criteria of what kind of countries qualify, with two broad principles in common …

First, frontier markets need to be investable, with a functioning local stock market that accepts foreign investment. Countries that bar foreigners can’t be part of the club.

Second, frontier markets must be smaller and less liquid than the more-advanced emerging markets. This is what gives them such tremendous potential.

The frontier markets are scattered around the world. For instance, you’ll find them in …

Eastern Europe: Bulgaria, Croatia, Estonia, Romania, Ukraine

Latin America: Chile, Jamaica, Peru, Trinidad and Tobago

Africa: Botswana, Ghana, Kenya, Mauritius, Nigeria

Middle East: Bahrain, Jordan, Kazakhstan, Lebanon, Oman, Qatar

Asia: Bangladesh, Cambodia, Sri Lanka, Vietnam

Those are just a few examples. Many are not what you would consider to be tourist spots. They are places of incredible contrast: Stark poverty adjacent to gleaming cities of wealth. But they’re all moving quickly to join the globalized economy.

How You Can Invest In Frontier Markets …

As I mentioned earlier, I think most investors should avoid individual stocks from frontier markets. The risks are just too great unless you’re an expert who is on top of the local situation.

As far as I’m concerned, it’s much safer to go with an ETF that gives you a broad portfolio of stocks from a variety of frontier markets. Here are six ETFs you might want to consider:

  • Claymore/BNY Mellon Frontier Markets (FRN)
  • Market Vectors Africa ETF (AFK)
  • Market Vectors Gulf States (MES)
  • PowerShares MENA Frontier Countries (PMNA)
  • SPDR S&P Emerging Middle East & Africa (GAF)
  • WisdomTree Middle East Dividend (GULF)

All of these funds are fairly new, so don’t expect to see a long-term track record.

The Middle East is filled with frontier markets.
The Middle East is filled with frontier markets.

Also take note that most of the ETFs on this list have a regional focus. The last four specialize in the Middle East, North Africa, or both. This is a reflection of the energy capital that has flowed into those areas over the last few years.

Of these six ETFs, only the FRN has exposure to Asia, the Americas and Europe. Yet the FRN isn’t exactly “balanced.” Just four countries — Chile, Poland, Egypt and Colombia — account for three-quarters of the portfolio. Additionally, these larger positions are classified as “emerging” instead of “frontier” by many other index providers, such as Morgan Stanley Capital International (MSCI).

Keep in mind, as well, that all of these ETFs track indexes of frontier markets. They aren’t actively managed.

Many of the frontier markets are still difficult for U.S. investors to access, but that should change as additional ETFs are introduced. Another thing to remember is that frontier markets are all about risk.

Nevertheless, companies in these places are desperate for investors to help them expand. So if you’re willing to take on the risk of being a pioneer, there’s a chance you’ll be handsomely rewarded in the long run.

Best wishes,


P.S. I’m now on Twitter! Click here to follow my updates or open your own Twitter account

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules