Corporations are taking a closer look at frontier markets for investment opportunities. Retail investors can also tap into the pre-emerging economies through frontier markets-related exchange traded funds.
According to an A.T. Kearney survey of companies’ investment attitudes, a majority of firms are looking for new opportunities to expand in frontier markets, reports Dan Keeler for the Wall Street Journal.
Specifically, of the 500 companies surveyed, 43% are invested in frontier markets and over two-thirds plan to maintain their investments or add new opportunities.
“Investors haven’t turned the page on frontier markets,” Paul Laudicina, chairman of A.T. Kearney’s Global Business Policy Council, said in the article.
For the average retail investor, broad frontier market ETFs can help people diversify into some of emerging economies of tomorrow. The iShares MSCI Frontier 100 ETF (NYSEArca: FM), Global X Next Emerging & Frontier ETF (NYSEArca: EMFM) and Guggenheim Frontier Markets ETF (NYSEArca: FRN) all cover a broad basket of varying frontier countries.
FM’s country weights include Kuwait 24.2%, Argentina 14.4%, Nigeria 12.6%, Pakistan 10.4%, Kenya 8%, Oman 5.9%, Morocco 5.5%, Kazakhstan 4%, Vietnam 3.7%, Romania 3.5%, Bangladesh 3.0% and Sri Lanka 2.5%.
EMFM includes a predominately emerging market tilt at 76.9%, but also includes a 23.1% weight toward frontier countries, including Argentina 3.8%, United Arab Emirates 3.3%, Kazakhstan 1.5%, Panama 1.8%, Qatar 1.9%, and Bangladesh 1.1%, among others.