This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

ETFs for Investing in Frontier Markets

NEW YORK ( TheStreet) -- There's lots of talk about asset bubbles and oversaturation in emerging markets like Brazil, India and China, so investors looking to diversify their portfolios may want to investigate frontier markets instead.

According to the International Monetary Fund, 17 of the 20 fastest expanding economies fall into the frontier market category, which refers to developing markets at a much earlier stage of economic and financial development than emerging markets.

Examples include Qatar, Uzbekistan, Pakistan, Vietnam, Argentina, Chile, Ghana and Angola.

These markets are attractive partly because their lack of access to Western financial markets shielded them from the global credit crisis.

They also are developing rapidly, which generally translates into higher earnings potential for domestic companies and investors.

Frontier markets also offer investors the opportunity to diversify their portfolios, because these markets have growth dynamics that often do not correlate with the economies of developing nations.

Additionally, growth in China and India is likely to trickle down and have a domino effect in some these frontier nations. This trend is already starting to emerge as many of these countries are witnessing an expansion of their middle class, which is increasing spending power and consumer consumption.

Lastly, some observers suggest that some of these markets are undervalued because they are rich in natural resources and commodities while enjoying low labor costs. In fact, Ghana is the world's second largest cocoa producer, Angola is the largest crude oil producer in Africa, Qatar has an ample supply of crude oil and natural gas and Chile is known for its copper production.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
PMNA $13.61 0.44%
AFK $26.52 0.00%
FRN $14.17 0.00%
GULF $20.75 0.00%
AAPL $130.28 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs