Chinese stocks have weakened on growth concerns, with small-caps leading the decline.
The emerging market economies include countries that are still developing liquidity in local debt and equity markets and some form of market exchange and regulatory body. The emerging markets are typically known for their faster economic growth but come with considerable risk associated with political instability and currency volatility, among others.
Frontier markets, or pre-emerging markets, include countries with capital markets less developed than those found in the emerging markets. While frontier market investors may capitalize on robust returns, these markets also come with considerably higher risks.
The Frontier Market ETF includes country exposure to Kuwait 25.6%, Qatar 17.5%, U.S. 13.5%, United Arab Emirates 13.5%, Nigerai 13.3%, Pakistan 4.8%, Kenya 4.4%, Oman 3.8%, Kazakhstan 3.6% and Argentina 3.4%.
“2013 has been a year in which investors have been pushing the envelope for returns and showing more willingness to venture into less familiar territories,” Morgan Harting, a senior portfolio manager at AllianceBernstein, said in the article. “With growth in emerging markets decelerating in recent years, people who have been investing in this asset class have started wondering where the next big growth story will be, and more are looking at the frontier markets.”
For more information on the frontier markets, visit our frontier markets category.
Max Chen contributed to this article.