Investments into ETFs have grown strongly over the past 10 years led by the low-cost funds from issuers like Vanguard and Blackrock. Yet investors in frontier markets have traditionally not benefited from this trend with ETF providers largely ignoring this section of the market. Given liquidity issues and lack of demand in comparison to developed markets, you can hardly blame issuers for the lack of frontier market ETFs.
However, in the past 5 years we have seen smaller, niche ETF issuers enter the market with frontier market ETFs. By our count, 9 new ETFs have been listed on US markets in the past 5 years, bringing the total number of ETFs with majority frontier market exposure to 18.
This is much more than the top 3 or so ETFs that you normally find on ETF websites, which is why we have created this more complete list which we plan to update on a semi-annual basis. We look only at ETFs listed on US markets (the NYSE for most of these).
Two Main Types of Frontier Market ETFs
We’ve split our list of frontier market ETFs into two main types: Global ETFs and Regional ETFs.
Global ETFs have holdings from countries in multiple continents and are more focused on providing a way of investing in the broader frontier market.
Regional ETFs are focused on one specific area or country, and more suited for investors looking to play a specific investment story.
Data has been updated as of September 2016:
Global Frontier Market ETFs:
|Ticker||Name||Issuer||Inception Date||Total Assets (USD mio)|
|FM||iShares MSCI Frontier 100 ETF||Blackrock||12-Sep-12||409.69|
|HYEM||Emerging Markets High Yield Bond ETF||Van Eck||8-May-12||305.90|
|FRN||Guggenheim Frontier Markets ETF||Guggenheim||12-Jun-08||38.58|
|IGEM||EM Investment Grade + BB Rated USD Sovereign Bond ETF||Van Eck||13-Jul-16||15.00|
|EMFM||Next Emerging & Frontier ETF||Global X||6-Nov-13||14.35|
Regional Frontier Market ETFs:
|Ticker||Name||Issuer||Inception Date||Total Assets
|VNM||Vietnam ETF||Van Eck||11-Aug-09||350.30|
|ECH||iShares MSCI Chile Capped ETF||Blackrock||12-Nov-07||331.46|
|EPU||iShares MSCI All Peru Capped ETF||Blackrock||19-Jun-09||218.03|
|GXG||MSCI Colombia ETF||Global X||2-May-09||88.78|
|AFK||Africa Index ETF||Van Eck||10-Jul-08||72.00|
|ARGT||MSCI Argentina ETF||Global X||3-Feb-11||71.86|
|EGPT||Egypt Index ETF||Van Eck||16-Feb-10||24.70|
|NGE||MSCI Nigeria ETF||Global X||2-Apr-13||22.83|
|GULF||Middle East Dividend Fund||Wisdom Tree||16-Jul-08||20.45|
|ICOL||iShares MSCI Colombia Capped ETF||Blackrock||18-Jun-13||17.24|
|PAK||MSCI Pakistan ETF||Global X||22-Apr-15||10.67|
|MES||Gulf States Index ETF||Van Eck||22-Jul-08||7.00|
|AND||FTSE Andean 40 ETF||Global X||2-Feb-11||4.00|
Frontier Market ETF Issuers:
We currently track 5 different ETF issuers that offer frontier market ETFs.
Blackrock (iShares): Website
iShares is one of the biggest ETF providers in the world, and their main frontier market ETF, FM, has often been the only real choice for investors looking for a global frontier market ETF. We reviewed this ETF a while back (found here), but they also have some South-America focused ETFs available.
Van Eck: Website
Van Eck started with mainly region focused ETFs such as it’s popular Vietnam focused ETF, VNM. Recently, it has released a couple Bond ETFs that hold a significant chunk of frontier market debt, allowing frontier market ETF investors to invest in bonds for the first time.
Global X: Website
Global X is a relatively new entrant to the field having been founded in 2008. As a result, their ETFs tend to be smaller than the others but they are a welcome addition as their regional ETFs like PAK and NGE focus on regions that were completely under-served before.
Guggenheim is more known for their developed market ETFs, but FRN was one of the first frontier market ETFs ever released.
Wisdom Tree: Website
Wisdom Tree is an ETF provider known for their focus on dividends as a differentiation between other similar regional ETFs by rival providers.