Frontier Market ETFs Poised To Become Riskier

May 16, 2017

Other Frontier Market Options

Should investors be concerned? Not necessarily, but they should be aware that frontier market investing is not for everyone. There's only one ETF targeting an MSCI frontier market index, and anyone investing in that fund should expect the high risk, high turnover and lack of liquidity that comes with the frontier market territory.

Investors should also consider that the frontier market space isn't just limited to MSCI indices or FM. The $63 million Guggenheim Frontiers Markets ETF (FRN) tracks the BNY Mellon New Frontier Index. A different index means different rules and exposure for FRN compared with FM.

Top 10 Country Holdings For FRN

Country Weighting (%)
Argentina 17.0
Kuwait 15.0
Vietnam 9.5
Pakistan 9.0
Morocco 8.2
Nigeria 8.1
Romania 6.9
Panama 6.1
Oman 5.5
Kenya 4.9


There's also the $15 million Global X Next Emerging & Frontier ETF (EMFM) to consider. It tracks the Solactive Next Emerging & Frontier Index. EMFM holds a blend of frontier market and emerging market stocks. Crucially, it excludes stocks of the largest emerging market countries, such as Brazil, China, India and Russia, creating a unique type of exposure for investors.

Top 10 Country Holdings For EMFM

Country Weighting (%)
Thailand 11.7
Indonesia 10.3
Malaysia 9.0
Mexico 8.8
South Africa 8.1
Turkey 7.3
Poland 6.0
Chile 4.5
Argentina 4.1
Philippines 4.0


Interestingly enough, FM, FRN and EMFM have all performed similarly this year. The chart below shows their year-to-date performance.

Chart courtesy of


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