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 (ETF) form.

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 economies.

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:

  • The Claymore/BNY Mellon Frontier Markets ETF (NYSEArca: FRN) covers a good range of frontier countries, such as Egypt, Colombia and Kazakhstan. Still, the fund has a high exposure to Chile at 31%. FRN has an expense ratio of 0.65% and has 46 holdings, with an emphasis on large-caps. FRN also includes some U.S.-listed stocks, writes ETF Professor for Benzinga.  Financials makes up 40% of the ETF. Two Latin American frontier market ETFs include the iShares MSCI All Peru Capped Index (NYSEArca: EPU) and iShares MSCI Chile Investable Market Idx (NYSEArca: ECH).
  • The SPDR S&P Emerging Middle East & Africa ETF (NYSEArca: GAF) 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 Africa, Van Eck Market Vectors Africa Index ETF (NYSEArca: AFK) includes South Africa, Nigeria, Morocco and Egypt. AFK has an expense ratio of 0.83%. The largest African economy, South Africa, is accessible with iShares MSCI South Africa ETF (NYSEArca: EZA).

Exposure to the Gulf and Middle is may be accessed through WisdomTree Middle East Dividend ETF (NYSEArca: GULF), which has an expense ratio of 0.88%, and Van Eck Market Vectors Gulf States ETF (NYSEArca: MES), 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.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.