ETF Industry's Next Conquests: Africa and Mideast

In addition to the lack of liquidity, the challenges of investing in frontier markets include restrictions on foreign investment and repatriation of funds.

Also, few of these countries have regulatory bodies for their financial markets.

Out of 200 potential markets, FTSE envisions only 30 potential candidates for a frontier market index.

Currently, there are few, if any, ETFs that offer exposure to these markets. But it's only a matter of time: In addition to FTSE Americas, Bank of New York Mellon(BK Quote - Cramer on BK - Stock Picks) is getting in on the action; it plans to license indices that track frontier markets.

The new indices will track "the emerging of the emerging markets," says BONY's Rodriguez. He says the indices will hold global depositary receipts, or GDRs, of African and Middle East companies that trade on European exchanges.

Bank of New York Mellon is already a player in the market for ETFs that track foreign markets; its indices of American depositary receipts make up the foundation for PowerShare's BLDRs family of ETFs, such as the BLDRs Emerging Markets 50 ADRs Index Fund(ADRE Quote - Cramer on ADRE - Stock Picks).

Among other tidbits gleaned from the conference:

• Index IQ, the index provider for the Claymore/IndexIQ Small-Cap Value ETF (SCV Quote - Cramer on SCV - Stock Picks), has filed to launch three additional ETFs.
• The Vanguard Group has registered four actively-managed fixed-income ETFs with the Securities and Exchange Commission.
• Northern Trust Global Investments expects to launch a series of ETFs that will track the local flagship indices of a variety of foreign countries, such as the CAC 40 in France.
• Invesco(IVZ Quote - Cramer on IVZ - Stock Picks), the parent company of PowerShares Capital Management, plans to rebrand the subsidiary as Invesco PowerShares.