Frontier Market ETFs Trying to Participate in EM Rebound

Emerging markets equities and exchange traded funds are rebounding this year, but some investors may be wondering when frontier markets equivalents, such as the iShares MSCI Frontier 100 ETF (NYSEArca: FM), will start participating.

Up about 4% over the past month, FM could be showing signs of more upside to come. A weaker dollar and a Federal Reserve that appears increasingly patient regarding interest rate hikes are bolstering the case for emerging markets.

A weaker dollar also makes it easier for developing economies to service debt, which many governments have denominated in U.S. dollars. Moreover, a depreciating greenback has helped support prices for raw materials, such as oil and metals, which are among some large exports of many developing countries.


Argentina, one of FM’s largest country weights, is helping steady the frontier markets ETF.

The Global X MSCI Argentina ETF (NYSEArca: ARGT) is one of this year’s best-performing single-country ETFs as market observers seem inclined to wager that Argentina’s newly elected Mauricio Macri could mean big changes in the economy after years of tepid growth. The pro-market Macri has pledged to quickly reverse much of the previous heavy-handed economic policies and open up the economy that has been posting back-to-back years of near stagnate growth, Bloomberg reports.

Related: How Central Banks Affect LatAm ETFs