Investors are wandering further afield in emerging markets in search of countries with better economic growth rates and more manageable debt relative to developed economies. Some are using frontier markets ETFs to buy countries and regions with one trade, low costs, diversification and liquidity.

ETFs for this burgeoning asset class include iShares MSCI Frontier 100 Index (NYSEArca: FM), Guggenheim Frontier Markets ETF (NYSEArca:  FRN) and PowerShares MENA Frontier Countries ETF (NYSEArca: PMNA). [Frontier Market ETFs: Get in on the Ground Floor]

These ETFs often invest in countries with more attractive GDP growth than the U.S. and other developed markets. Of course, they are risker and long-term investors should be prepared to endure volatility. Investors also need to be cognizant of any currency-related risks in these foreign-equity funds.

Frontier ETFs can provide diversification in a market that seems highly correlated on major economic and political risks, reports Roben Farzad for Bloomberg Businessweek.

Frontier markets represent 30% of the world’s population “crammed into some of its fastest-growing economies,” Farzad writes. “Nourished with enough stability and free-market reforms, and the noblesse largesse of foreign investors, frontier markets are primed to go more mainstream, especially with ETFs like the fledgling iShares MSCI Frontier 100 (FM) now casting for talent.”

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