NEW YORK (TheStreet) -- Judging by the results in 2013 of the BRIC markets and the iShares MSCI Emerging Markets ETF (EEM), this has been a terrible year to invest in many developing markets. However, smaller emerging markets and frontier markets have done relatively well. As Barron's pointed out over the weekend, the iShares MSCI Frontier 100 Index Fund (FM) (a narrow proxy) is up 17% this year compared to a decline of 7% for EEM (a broad proxy for emerging markets).
Funds offering frontier market exposure are becoming more popular, which is why Global X last week launched the Next Emerging and Frontier ETF (EMFM). The inspiration for this fund came from the so called Next 11, a term which was coined by Goldman Sachs-JB Were in the middle of the last decade in an effort to find the next big thing after the BRICs, which of course are Brazil, Russia, India and China.
The Next 11 countries as originally conceived include Mexico, Korea, Bangladesh, Egypt, Indonesia, Iran, Nigeria, Pakistan, the Philippines, Turkey and Vietnam. EMFM actually has exposure to 35 countries but excludes Korea and Iran.
Global X notes what it believes is a demographic advantage for the countries in EMFM over the BRIC, with an average age of 28 vs. 33 for the BRIC. The average age for developed markets is 40. Younger populations are viewed by demographers as being a favorable growth catalyst.