Frontier Markets ETF Frequently Asked Questions
What are some of the risks?
How can I invest in these markets?
When were Frontier Market Indexes developed?
What are the countries considered frontier?
What was GDP growth last year?
Q: When were Frontier Market Indexes developed?
A: The International Finance Corporation first created the S&P/IFC Frontier Index over a decade ago. The frontier market index measures the performance of stocks of 22 countries that are not quite on the "A list" of global tourist -- or investment – destinations. back to top
Q: What are the countries considered frontier?
A: While it does absolutely very by index, and by the investment professional you ask, these countries will be the most common. Vietnam, Bulgaria, Croatia, Estonia, Kazakhstan, Romania, Slovenia, Ukraine, Kenya, Mauritius, Nigeria, Ecuador, Tunisia, Lebanon, Bahrain, Kuwait, Oman, Qatar, United Arab Emirates, Sri Lanka, Bangladesh, Botswana, Ghana. back to top
Q: What are some of the risks?
A: Frontier Stock markets tend to be illiquid. Also the investment cycle is more exaggerated in frontier markets. This means the highs higher and the lows are lower. In 2005, Gulf stock markets were the best markets in the entire world. But in 2006, the Saudi market halved. So there is volatility. back to top
Q: What was GDP growth last year?
A: Countries in the MSCI Frontier Market index notched a very good 6.7% GDP growth in 2007. back to top
Q: How can I invest in these markets?
A: The investment opportunities are still fairly limited, but look for the pace to pick up very quickly. There are only a few mutual funds with significant frontier exposure, but some new Frontier Markets ETFs have just been created or filings to create them have been in progress. back to top