“True frontier markets (as defined by per capita income) is anticipated to take on a greater share of the index. Combined exposure to Vietnam and Sri Lanka should nearly double from 3.25% to 7%, for example. While the exposure to each individual lower-income country will be small, the collective increase in exposure is large. Exposure to countries defined as having a per capita income below $10,000 should increase to 47% from 29%,” said Koesterich.
While Qatar and UAE are leaving FM and will likely be afforded only slight weights in the MSCI Emerging Markets Index, investors have options for continuing to gain adequate exposure to those markets.
The WisdomTree Middle East Dividend Fund (NasdaqGM: GULF), which is up 17.5% this year, devotes a combined 58.5% of its weight to Qatar and UAE. The Market Vectors Gulf States Index ETF (NYSEArca: MES) devotes 62.4% to those countries. MES is up over 21% this year. [UAE, Qatar Boosting These ETFs]
iShares MSCI Frontier 100 ETF