If you're looking to bet on growth with a side of risk, frontier
markets might be your speed. Allocations to these small, expanding
markets exist in exchange traded fund (
Frontier markets - countries even less developed than emerging
ones - could offer better returns over time, but don't expect the
performance to be as predictable as that of developed countries,
remarks Will McClatchy for NASDAQ
. Frontier economies also have low correlations to developed
Look out for a high correlation with commodities, though. Many
emerging and frontier markets have vast natural resources, so be
sure that you're not overallocated. [
Emerging Market ETFs: Poised to Break Out?
Broad ETF investments include:
Claymore/BNY Mellon Frontier Markets ETF (NYSEArca:
SPDR S&P Emerging Middle East & Africa ETF
is more narrowly concentrated compared to FRN. About 90% of the
total portfolio goes to South Africa and Israel.
Economies in Africa are operating with little debt and the
content is rich in natural resources. The International Monetary
Fund stated that "one of the least noticed aspects of the global
downturn has been the resilience of the sub-Saharan Africa region".
Sub-Saharan economies are expected to grow by 5% this year. For
Van Eck Market Vectors Africa Index ETF (NYSEArca:
Exposure to the Gulf and Middle is may be accessed through
WisdomTree Middle East Dividend ETF (NYSEArca:
, which has an expense ratio of 0.98%.
Emerging Eastern European countries are represented through the
SPDR S&P Emerging Europe ETF (NYSEArca: GUR)
, which has an expense ratio of 0.60%.
For more information on the frontier, visit our
frontier markets category
Max Chen contributed to this article.