Vecht did caution that the time is now to invest in frontier markets because as more Westerners learn of the advantages offered by these markets, volatility will increase. Like FM, Vecht’s BlackRock Frontier Inventories Trust is heavily allocated to the Middle East and Africa.
However, FM will look different in the second quarter of 2014 because index provider MSCI has promoted Qatar an UAE to emerging markets status. When those countries, nearly half of FM’s weight could be allocated to just Kuwait and Nigeria. FM currently has a 30-day SEC yield of 4.58% compared to 1.83% for the iShares Emerging Markets ETF (NYSEArca: EEM), according to iShares data.
FM debuted just 54 weeks ago and already has over $300 million in assets under management.
iShares MSCI Frontier 100 ETF
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.