Even with Thursday’s Federal Reserve-induced gains, it is still accurate to say the past three months have been rough on investors in emerging markets ETFs. The iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) is down 7.5% and investors can take their pick of slack-performing single-country funds, including those tracking the four BRIC nations.

While frontier markets are perceived to be riskier than their emerging peers, ETFs offering exposure to the former group have proven sturdy amid stunning declines for traditional developing world ETFs. Assets under management for some frontier funds have been soaring this year as investors embrace the fact markets such as Kuwait, Nigeria and Vietnam do not share intimate correlations to U.S. and emerging markets equities. [Investors Exploring Frontier ETFs]

One advantage of frontier markets stocks is that the asset class is still relatively under-owned at the institutional level. The most recent spate of global market volatility did not last long enough for fund managers to get around to ditching their frontier holdings, reports Robin Wigglesworth for the Financial Times, citing Sven Richter, head of frontier markets at Renaissance Asset Managers.

Frontier ETFs such as the iShares MSCI Frontier 100 ETF (NYSEArca: FM) are by no means free from risk. These markets, on both the equity and bond sides, are not nearly as liquid as their developed and emerging colleagues. As the FT notes, valuations are frothy in parts of the frontier world, particularly among defensive sectors such as staples.

Country allocations are also pivotal. A significant part of FM’s early year success is the ETF’s substantial allocations to Qatar and the United Arab Emirates. Stocks in those countries have been outstanding performers this year, but those nations will depart FM next year for the MSCI Emerging Markets Index after index provider MSCI promoted them to emerging markets status. That means FM could see larger allocations to markets such as Argentina, Nigeria and Vietnam. [Country Weights Important in Frontier ETFs, Too]